Editing Class action (section)

==Criticisms==
There are several criticisms of class actions.<ref>[[Richard Allen Epstein|Richard Epstein]], [http://www.manhattan-institute.org/html/cjr_4.htm "Class Actions: The Need for a Hard Second Look"]</ref><ref>[[Michael Greve]], [http://www.aei.org/book/814 "Harm-Less Lawsuits? What's Wrong with Consumer Class Actions"] {{webarchive|url=https://web.archive.org/web/20090715221116/http://www.aei.org/book/814 |date=2009-07-15 }}</ref><ref>[[Jim Copland]], [http://www.pointoflaw.com/classactions/overview.php "Class Actions"]</ref> The preamble to the Class Action Fairness Act stated that some abusive class actions have harmed class members possessing legitimate claims and defendants acting responsibly; have adversely affected interstate commerce; and have undermined public respect for the country's judicial system.

Class members often receive little or no benefit from class actions.<ref name=":0">{{Cite web|title = Do Class Actions Benefit Class Members?|url = http://www.instituteforlegalreform.com/research/do-class-actions-benefit-class-members|website = www.instituteforlegalreform.com| date=11 December 2013 |access-date = 2016-01-17}}</ref> Examples cited for this include large fees for the attorneys, while leaving class members with coupons or other awards of little or no value; unjustified awards are made to certain plaintiffs at the expense of other class members; and confusing notices are published that prevent class members from being able to fully understand and effectively exercise their rights.<ref name=":0" />

For example, in the United States, class lawsuits sometimes bind all class members with a low [[settlement (law)|settlement]]. These "[[coupon settlement]]s" (which usually allow the plaintiffs to receive a small benefit such as a small check or a coupon for future services or products with the defendant company) are a way for a defendant to forestall major liability by precluding many people from litigating their claims separately, to recover reasonable compensation for the damages. However, existing law requires judicial approval of all class-action settlements, and in most cases, class members are given a chance to opt out of class settlement, though class members, despite opt-out notices, may be unaware of their right to opt-out because they did not receive the notice, did not read it or did not understand it.

The Class Action Fairness Act of 2005 addresses these concerns. An independent expert may scrutinize coupon settlements before judicial approval in order to ensure that the settlement will be of value to the class members (28 U.S.C.A. 1712(d)). Further, if the action provides for settlement in coupons, "the portion of any attorney's fee award to class counsel that is attributable to the award of the coupons shall be based on the value to class members of the coupons that are redeemed". 28 U.S.C.A. 1712(a).

A common critique is that class actions are a form of judicially sanctioned [[extortion]].<ref name="Coffee_Page_133">{{cite book |last1=Coffee |first1=John C. |author1-link=John C. Coffee |title=Entrepreneurial Litigation: Its Rise, Fall, and Future |date=2015 |publisher=Harvard University Press |location=Cambridge |isbn=9780674736795 |page=133 |url=https://books.google.com/books?id=Vc7eCQAAQBAJ&pg=PA133}}</ref>  The extortion thesis was first articulated by law professor [[Milton Handler]], who published a famous law review article in 1971 calling the class action a form of "legalized blackmail".<ref name="Coffee_Page_133" />  It has garnered the support of a significant minority of the justices of the [[U.S. Supreme Court]], along with prominent judges like [[Henry Friendly]] and [[Richard Posner]].<ref name="Coffee_Page_133" />  However, empirical studies have generally found the extortion thesis to be "overstated".<ref name="Coffee_Page_133" />