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Fee Counsel—The Antidote for Collusive Class Action Fee Agreements

By Lewis Goldfarb
March 04, 2006
Without the contingent fee, class action litigation in the United States would not exist, and millions of consumers and investors would be denied well-deserved redress. Because of the contingent fee, however, class action lawyers often receive excessive compensation for their representation, usually at the expense of their clients. The reason for this anomaly is three-fold: (1) the “client” in class action litigation is poorly positioned to supervise class attorneys; (2) the vast majority of class actions are resolved before trial with settlements that include “clear-sailing” provisions (agreements by defendant not to contest a specified fee); and (3) the current system lacks adequate controls to safeguard the class from collusive fee agreements....