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No, this is how it's done:
First, lawyers present "fair estimate" of how many people are potentially affected - this number is based on sales/returns/free bumpers, etc.
In this particular case, the class appears to consist of people who opted out of the bumper program and affirmatively indicated that they had an antenna problem. Which won't be based on sales/returns/etc. (At least that's what I can find out about the case - the settlement website isn't up yet.)
This number is inflated as much as possible with a help of "experts" who testify for the plaintiff. Then, the total reward is assigned loosely based on this number. Then, court fees assigned and contingency fees are negotiated/approved by the court - somewhere within 10-20% of total reward in class action case. This is the money that law firms get and split between them. And what is left is devided by estimated number of participants/claimants - this is where $15 per customer comes from. The system is designed to push defendant for a settlement because only a fraction of claimants will file for $15 dollars. And a good chunk of money will sit in an escrow until the deadline is reached and will eventually return to defendant (Apple in that case). But law firms are the first ones who get paid.
All of this is true.
If you do the math, you'll realize lawyers cut is much more than just several hundred thousand $$ as somebody naively wrote here.
No. You misread what people wrote. If you look again, people are naively claiming that the lawyers will receive over a HUNDRED MILLION dollars in fees. Not a hundred thousand.
I believe that fees will almost certainly be north of a million (depending on the class). But I think it's ludicrous to believe that they will be over $100 million. That's kind of the point of my post.
It is many millions. This is a polished money making scheme that is built into the final cost of the product (not just Apple) and makes whole parasitic class of people that don't produce any product or service very rich. Their legal expenses are relatively small /paid by the defendant. All the cost of a settlement is eventually paid by the end consumers, us, in one form of another (higher cost of accessories, service, etc). It is a loose/loose situation for consumer, whether someone takes $15 or not - a drop in the bucket. The only winners are trial attorney's mafia and fat legal system that justifies its existence by allowing those games.
One of the ways to stop the hustling is to ban litigation on contingency. But this is easier said than done as most of the US political establishment are lawyers.
Well, of course we don't have to have contingency fees. But the cure would probably be much worse than the problem.
If a company rips off consumers (let's not assume its Apple) to the tune of $30 each, there is no way that an individual consumer can bring a suit. With or without contingency fees. So there are three possible outcomes:
1. The consumers are ripped off and have no realistic recourse against the company.
2. There is significantly enhanced governmental regulation of all businesses, giving something like the FTC the power to order a company to pay all affected consumers $30.
3. We have class actions but attorney's fees are calculated on an hourly basis.
1. is not acceptable.
2. is probably not acceptable to businesses (because of increased costs and regulation) *or* consumers (because of regulatory capture).
3. would work, but it's hard to see that it's an improvement over the existing system (it is allowable under the existing system, too, although it's less common). It's not clear that it's cheaper, and it can lead to a situation where consumer lose more than they would on a contingency basis (particularly where the percentage is set by the court).
WRT contingency fees generally (in non-class actions), we can get rid of them as soon as we have national health care. But not before. Removing contingency fees will remove access to the courts from the poor and lower middle class (basically, anyone who can't pony up $5,000 or so). This may be acceptable to some people in some circumstances - but it is clearly not acceptable to any but the dangerously insane if the result is that people who can't pay $5,000 for a lawyer are also stuck with health care costs (that they also can't pay) caused by, say, a drunk driver.
The US chooses to "regulate" a lot of things by imposing looser regulations but providing an enhanced ability for people to regulate things themselves through the courts.
The EU tends to regulate things through universal health care, significantly enhanced regulation of businesses, and limited access to the courts.
Most "tort reform" advocates want looser regulation of business *and* restricted access to the courts for those without ready cash.