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Lawmakers Push for New Law Limiting Class-Action Lawsuits

By Brian Chase on February 21, 2017 - No comments

Lawmakers Push for New Law Limiting Class-Action Lawsuits

Congress Republicans are pushing for a new law that would essentially limit class-action lawsuits scaling back the ability of large groups of consumers to band together and sue corporations. According to a news report on Buzzfeed.com, the House Judiciary Committee has approved a bill, which has the potentially to transform class-action lawsuits.

The business lobby in Washington has long complained about the current system of class-action lawsuits accusing “opportunistic lawyers” of exploiting the system for their own gain instead of serving clients. However, consumer advocates who understand the value of class-action lawsuits, have said that it is an essential tool of corporate accountability and pretty much the only way average people can challenge big businesses in court.

New Bill on the Way

Over the last few years, companies have avoided lawsuits by inserting language into fine print on contracts requiring that any dispute be settled by private arbitrators instead of courts. However, during the Obama administration, regulators limited those arbitration clauses proposing rules that ban them from some types of contracts such as student loan agreements and some types of financial services.

But lawmakers in Congress are now in the process of drafting a law that would make it more difficult to file a class-action lawsuit in the first place. They say the goal is cut down on frivolous lawsuits while keeping the door open for those who have genuine claims. Even though the bill has cleared the House Judiciary Committee, it’s not clear if the Republican leadership will push it through both chambers of Congress.

Consumers’ Access to Justice

Several lawyers nationwide are already distressed by this bill saying that it will destroy class actions, which are the only way for Americans to hold unscrupulous corporations accountable. For example, those who suffer losses as a result of financial fraud, deceptive practices, defective products or wage theft may not be able to get the justice they seek. Other academics have said this bill will “radically restrict” access to justice for injured consumers, employees and small businesses by imposing unrealistic and unnecessary requirements.

Class-action lawsuits have long been the “whipping boy” of tort reform advocates. Those opposed to class-action lawsuits tend to point out that it’s just a big payday for lawyers and nothing more. But, as class action attorneys, we’ve seen first-hand the changes these lawsuits bring about. We’ve helped victims of wage theft receive the pay and benefits they are owed. We’ve held manufacturers of dangerous and defective products accountable for the injuries and damages their products caused. Class-action lawsuits have a legitimate place in our civil justice system because they are often the only recourse for average people when it comes to fighting large corporations.

Posted in: Class Action

About the Author: Brian Chase

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