A proposed class action settlement with American Honda Motor is just the most recent example of what has gone terribly wrong with class action lawsuits. At first, class action lawsuits appeared to be a win-win situation. By consolidating similar cases with the same defendant, these cases could move through the court system much faster. Class members would benefit and there would be an incentive to correct any defect that may have existed with the product or service.
But somewhere along the way, someone came up with the idea of awarding the harmed consumer a coupon instead of cash. Worse yet, the coupons to the class of plaintiff’s requires a future purchase at the company that allegedly wronged them while the plaintiffs’ attorneys reap millions of dollars in contingency fees.
The lawsuit alleged that Honda inflated fuel efficiency claims for its Civic Hybrid vehicles. In the proposed settlement, the deal would have provided 158,000 Civic Hybrid owners with rebates between $500 - $1,000 on a new Honda or Acura. The plaintiffs’ attorneys would have collected nearly $3 million in fees.
Great job looking out for the “little guy!” I’m sure they all feel very fortunate to have to buy a new car so the attorney’s can rake in a big payday.
Thankfully most state Attorney General’s objected to the scheme. So, it’s back to the drawing board. Just a suggestion…how about flipping the settlement? Rebates for Hybrids to the lawyers…gift cards for gasoline to the actual harmed class members?