UK legal publication The Lawyer has an interesting article out today for anyone tracking trends in class and collective action reform across the pond. According to the article, Which?, a consumer organization granted the right to pursue collective redress on behalf of consumers harmed by conduct declared to have violated antitrust laws, isn’t convinced that it would pursue another one after facing several practical barriers in pursuing a case against a sports merchandiser for allegedly selling overpriced replica soccer jerseys. Among the challenges cited by a lawyer for the group was the fact that few consumers found it worth their while to pursue a claim in light of the relatively modest amounts they stood to gain (£20 per person), the fact that consumers had to provide proof of purchase, and the fact that years had passed by the time the opportunity to make a claim became available.
The report notes that even after a highly publicized media campaign highlighting the case, only about 500 consumers decided to participate. The total amount of the settlement payout was around £18,000, plus reasonable litigation costs, as compared to a multi-million dollar penalty imposed against the company for its anti-competitive actions in the first place. An earlier article by The Lawyervalued those costs at many hundreds of thousands of pounds, dwarfing the amount of the payout. That article quotes a lawyer for which as saying that the use of an opt-in versus an opt-out system contributed to the discrepancy.
The issue of the cost of litigation versus the actual benefit to victims, however, is one that arises whether the system is opt-in or opt-out. Even in the U.S., which technically has an opt-out system, actual monetary redress to alleged victims happens as a result of some sort of claim-in process, either as part of a settlement or a distribution of a judgment. Unclaimed funds are either distributed pro-rata to those class members who do file a claim, returned to the defendant, paid to the government, or distributed to charity as part of a cy pres remedy. In any event, the system does not in any way guaranty redress to those who don’t have the means to prove their entitlement to relief or who don’t find it worthwhile to pursue a remedy.