Class action mistakes are not unheard of, especially for rookie class counsel. There are different rules to play by, and the fate of an entire class of plaintiffs rides on your shoulders.
But even experienced class counsel make mistakes that sometimes result in harsh consequences, like sanctions, the denial of attorney's fees, or the rejection of a class settlement.
With those consequences in mind, check out these five rookie mistakes other class lawyers have made, so you don't end up following in their footsteps:
- Mistakes in drafting notices. Federal Rules require class-action and settlement notices to be written in "plain, easily understood language." But poorly written notices are still among the most common class action mistakes, according to a study cited by the ClassActionBlawg. On the positive side, courts are now more receptive to different forms of notice, including via email and websites.
- Failure to disclose conflicts of interest. This recently came up in a class-action lawsuit against Barbri and Kaplan, in which a BigLaw firm had to forfeit more than $7 million in fees. The firm's failure to disclose class reps' incentive awards, and failure to get informed consent from class members, was an "egregious ethical violation," the Ninth Circuit held, according to the ABA Journal.
- Unreasonable fees. Class counsel deserve compensation for their time and efforts, but attorney's fees must be necessary and reasonable. In one recent case, a judge found an attorney had overbilled class clients for working on settlement documents, and that the firm's rates were excessive. That led the judge to pursue sanctions.
- Unreasonable expenses. In the same case, the judge chided class counsel for unreasonable expenses such as first-class airplane tickets and "a pre-mediation dinner for four totaling $402, including two bottles of $70/bottle wine and a $60 tip." In court, one of the class lawyers said she thought "that usually trial judges do not inquire as to claimed expenses" in class actions. She was wrong.
- Failure to keep track of everything. Class actions involve so many moving parts, it may make sense to hire a class action administrator to help mail and log notices and claim forms, review class members' documentation, and to help distribute the class settlement or award. Head to FindLaw's Legal Services Market Center to find vendors that can help prevent lawyers from making any class action mistakes.
- What is the Appropriate Standard for Class Action Attorney Fees? (FindLaw's U.S. First Circuit blog)
- Third Circuit Sends Back Sprint Class Action Settlement (FindLaw's U.S. Third Circuit blog)
- If at First You Don't Succeed, File a Copycat Class Action? (FindLaw's U.S. Seventh Circuit blog)
- Facebook Shareholders File Class Action Lawsuit Over IPO (FindLaw's Courtside)