CLASS ACTIONS
OPINION ON HOW THEY REALLY WORK

In reality, class action lawsuits are normally structured to benefit three parties, listed by order of priority. These parties are:

THE ATTORNEYS -- On BOTH Sides

THE COURT

And, SOMETIMES, The Original Class (Proponents)

That the attorneys on both sides are going to make money is obvious.  What is not always obvious is that the two sides are not always adversaries.  As there are several large firms that do a large percentage of all class action suits, what often happens is a firm which has filed a class action against one company in a particular industry often ends up filing against other companies in the same industry that have committed the same offense.

The other companies think, "Gee, "Company A" was caught, case law was established, the original firm has all the research, depos, etc.... (which are often not public by order of the court or agreement of the parties), and we better go to that firm and make the best deal possible (agree to pay large attorneys' fees) and get out as cheaply and quickly as possible before someone comes after us on their own.  These are often done by the same attorneys on both sides, on a very short time frame, and sometimes in the same court as the original case.

Remember, once they get past the "opt-out" date, class members are locked-in and all the companies past sins are wiped out by the court ordered judgment (which is normally agreed to by the parties).

The idea that the court is looking for "justice" is hideous.  What the court is looking for is to clear its docket.  99% of the time the court is going to accept any agreement which is reached by the two parties.  Remember that this judge is probably playing golf, dining, and socializing with the attorneys on both sides and is not looking to make enemies just for the hell of it when all of the legal parties are in agreement.

The class proponents (the person or persons who brought the original action) are in the enviable position of being the parties who must agree to any settlement.  Being the party who is in the "driver's seat" often has certain advantages.  "Greenmail", a tactic considered dirty and equivocated to blackmail, is often practiced.  More often than not, the Class Proponents receive expenses (travel, copying, and so forth.), are first in line for damages when the total monies are fixed, and various other advantages which are inducements to settle for what the attorneys have agreed upon.  They are often getting worn down at this time and various threats to make their lives hell (depos, cross actions, etc.) are starting to take their toll.

Although the above scenario is not always correct, chances are that it is closer to reality than not.  With this in mind, let's look at ways which you may profit from knowing how the system works on the Profit Strategies Page.