Thursday, April 28, 2011

Class-action lawsuits

One of the most powerful tools for the American people to protect themselves against corporate fraud is the class-action lawsuit. This allows a large group of people to collectively sue a company for compensation, even if their individual losses are not worth the effort or money. It makes people's complaints legitimate, and forces companies into courtrooms to defend against multi-million dollar losses.

But a recent ruling by the Supreme Court would allow companies to deny their customers the right to join class-action lawsuits against them. According to the ruling, it is within the rights of companies to add a clause to their fine print contracts that say the individual is not allowed to sue them as part of a collective unit, and must take legal action singly. The significance of this is that it will deter the millions of small claims that come to court every year as a result of class-action lawsuits.

Consider what would happen if you as an individual were cheated out of $50 from a company. You could sue them for the money, but the costs of going through the court system would vastly outweigh the gains you would make by doing so. With a class-action suit, you would have been able to join a million other people who had last $50 from the same company. That turns your lawsuit into one over $50 million, a very large chunk of change, and one that the company would almost certainly fight over. But without the ability to join a class-action lawsuit, your stuck taking a hit of $50 dollars from the company and you have no way of seeking arbitration.

This is the next step in stripping individuals of their rights as American citizens. Without collective lawsuits, there is nothing to stop corporations from continuing their fraud against the people. There may very well come a day when you are overcharged regularly without any explanation or reason, simply because there's nothing you can do about it.

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