I recently received a check for $10.59 as my total payment in a class action suit. I was one of more than 600,000 participants. The gross settlement was well over $100,000,000, and the class action attorneys’ fees exceeded $20,000,000.
Over the years, I’ve accumulated a folder with similar trivial distributions from class action suits. The defendants in these cases—the companies we do business with—pass the costs of the penalties on to us, along with the associated legal, administrative, and insurance expenses. We also invest in these companies, indirectly though banks, mutual funds, and retirement plans, or through direct investment. The costs of those lawsuits reduce our return on investment. And we pay for the associated costs of the court system, through taxes and fees—more money out of our pockets.
Just as with companies and organizations, the long-term success of our society is affected by the overall consequences of our methods for solving problems. Are we serving the greater need, or are we screwing things up with too much emphasis on just one piece of the puzzle?
Some class action suits are beneficial. But some of these lawsuits do nothing more than transfer a great deal of money from the public to a few private pockets. Society pays for this. I pay for this. And you pay for this. So thank you for your $10.59.
George M. Pomonik
Pomonik Consulting, Inc.
“Chaos Removal Services”SM
Copyright © George M. Pomonik, 2012. All rights reserved.