Protecting Consumer Lenders and Servicers from Class Action Abuse.
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On February 17, 2005, the U.S. House passed the Class Action Fairness Act of 2005 (S. 5) (the “Class Action Fairness Act” or the “Act”). The Act, signed by President Bush today, effects a sweeping overhaul of the current class action litigation system by providing a federal forum for oversight of many class actions and increased judicial scrutiny of settlements and plaintiffs’ counsel fees in such cases. The Act provides important procedural protections for companies targeted by the plaintiffs’ bar in nationwide class action litigation and certain mass litigations consolidated in state court for joint trial, helping to level the playing field for companies facing multi-state class actions. As a result, companies should be poised to take full advantage of the new laws. As many companies are painfully aware, the risks and costs of defending a nationwide class action lawsuit can be substantial. Defendants are often forced to litigate these “bet-the-company” cases in state court jurisdictions hand-selected by the plaintiffs’ bar. Many state court jurisdictions preferred by the plaintiffs’ bar are well-known for a lack of standards in certifying, overseeing and settling class actions. This article examines the new protections afforded by the Act and analyzes the changes to existing law. The most significant provisions of the Act are as follows: Expansion of Federal Jurisdiction The Act… Source : accessmylibrary.com |