Study Arose Out of Consumer Financial Protection Bureau Review.
As reported in a December 24, 2013 article in The Wall Street Journal, Mayer Brown law firm for the Chamber of Commerce Institute for Legal Reform launched a study out of concern that an ongoing review of arbitration agreements by the new Consumer Financial Protection Bureau could he headed toward regulating or banning arbitration agreements in consumer/employment contexts, with Minnesota Democrat Al Franken pushing legislation that would effectively ban arbitration in all consumer and employment contracts.
So, Mayer Brown did a study to see how consumers fare in class action cases. Here is what was reported in the WSJ article: out of 148 federal class actions reported by two major litigation publications in 2009, none of the cases went to trial or resulted in a judgment for the plaintiffs; 14% of the cases remained pending; and, of the 127 cases resolved by September 2013, 35% were voluntarily dismissed by the plaintiffs, 31% were dismissed on the merits by the court, and 33% were settled.
Only 33% of federal class actions settled as compared with 67% for all federal cases. Of six cases for which settlement distribution data was available to the public (because much of this data is not readily available for various reasons), five delivered funds to only miniscule percentages of the class: 0.000006%; 0.33%; 1.5%; 9.66%; and 12%.
Here is the conclusion of the WSJ article (obviously an op ed conclusion): “The only beneficiaries of expanding the potential pool of class-action lawsuits are the plaintiffs attorneys–and their yacht-builders.”