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- Title
NIPPING IT IN THE BUD: FIXING THE PRINCIPAL-AGENT PROBLEM IN CLASS ACTIONS BY LOOKING TO QUI TAM LITIGATION.
- Authors
BERGARA, NICHOLAS ALEJANDRO
- Abstract
The principal-agent problem in class actions, which occurs whenever the interests of class counsel (the agent) conflict with those of the class (the principal), has plagued the class action system for decades. When these conflicts of interest arise, they often lead to plaintiff classes receiving lower monetary awards than they otherwise deserve, above-market fees for attorneys, and underenforcement of claims against wrongdoers. Throughout the years, both Congress and scholars alike have tried to address this issue, but it persists. This Note invites Congress and scholars to think differently about potential solutions to a problem that has been around for far too long. It argues that looking to qui tam litigation, specifically, the False Claims Act, provides a unique approach that could help significantly curtail the principalagent problem. By permitting the government to install itself as lead counsel in class actions involving money damages--when it deems an action to be worthy--the financial incentives between any given class and its respective class counsel are realigned. While private attorneys seek the maximum amount of attorney's fees, even if it comes at the expense of the client, government lawyers do not have the same motivation. Adding an amendment to Federal Rule of Civil Procedure 23 permitting qui tam litigation would allow the government to act as a gatekeeper for class actions while leaving the option open for private attorneys to bring suit should the government decide not to do so. By providing different channels of enforcement, the amendment offers a promising opportunity to better deter private sector misconduct, discourage frivolous suits, and improve the overall outcomes for plaintiff classes.
- Subjects
POPULAR actions; FALSE claims laws; FRIVOLOUS suits (Civil procedure); LAWYERS
- Publication
New York University Law Review, 2022, Vol 97, Issue 1, p275
- ISSN
0028-7881
- Publication type
Article