Consumerist
Last year's class-action settlement against Mastercard, Visa, and several banks over the fees they charged customers who traveled abroad came up to about $336 million, and of that, 31 law firms are claiming a total of about $86 million for fees. The federal judge responsible for determining how much they get paid wants to know why.
"Can you explain to me why 31 law firms had to be involved with the plaintiffs?" Judge Pauley asked, adding that he "found a disconnect" between the number of the different groups of plaintiffs and the number of law firms. Ms. Sweeney [of Coughlin Stoia] explained that the "bulk of the work" - 84.7% - was done only by just six firms. Among those six firms are Ms. Sweeney's firm as well as the Philadelphia-based firms of Berger & Montague and Kohn Swift & Graf.Well, at least they brought the companies to justice for cheating their customers out of so much money—oh, wait, one lawyer on the case said that the $336 million represents only "between 9% and 42% of the fees that the card issuers had wrongfully charged." What's more, the current average payment for most class members (the ones who didn't send in itemized requests) will be about $25. Sometimes justice doesn't feel very satisfying.
One sticking point yesterday involved a separate $32 million legal fee award that the card issuers had agreed to pay Coughlin Stoia and three other firms. The fee came in a similar lawsuit brought in California that was dismissed on appeal.
A lawyer who was objecting to the settlement, Irving Bizar, yesterday advised Judge Pauley to take those $32 million away from the law firms and add it to settlement pool.
"Judge Asks Why So Many Law Firms Seek Fees in Suits" [The New York Sun]
RELATED "Reclaim Unnecessary Credit Cards' Unnecessary Foreign Transaction Fees" (Photo: Getty)
Comments
Backstory (of the linked variety) is a good thing.
@MickeyMoo: Check the "RELATED" link at the bottom of the post.
That reminds me. I still haven't received the settlement money. Time to find where I put the paper work.
I don't think you should have received your settlement yet. If you have submitted the paperwork, you should be in good shape. They are still figuring out the payment, as it says in the post.
the only winners in a class action lawsuit are the lawyers
I don't care how much they get. I just want my $25.
@chartrule: And the public, who benefit from the companies engaging in this kind of shadiness being punished.
There are NOT ENOUGH judges or people in prominent positions who ask these important questions.
I wish there were more like this judge.
If you don't ask, they will take even more.
The law firms take these cases on a contingent fee basis. If they don't win, they don't get paid.
These cases can drag on for years. If a law firm puts 20 attorneys on one case that lasts for 10 years, why shouldn't they be paid for that work, especially given the risk that they could lose and not be paid at all?
Yes, it sucks that the plaintiffs don't get more money, but the plaintiffs always have the choice to file their own lawsuits (at the cost of many thousands of dollars). By joining the class action, the settlement is less, but so is the risk involved.
The New York Sun? Is that like the New York TImes?
@chartrule: The only winners in ANY lawsuit are the lawyers.
The only way to get any real justice or oversight is to pass laws that force companies that engage in this type activity to pay back triple the amount taken to each wronged person. Taking that amount from the bank accounts of the individuals high up in the corporation would be another proper step.
@AutumnD: Not necessarily. Companies can ask a judge to lump other suits into a class action.
@rellog: Paying back triple will only work if the House of Isher does not get involved.
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