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Until relatively recently, the average person in the street would have no practical means of challenging a powerful global corporation in the event of a perceived injustice. However, the exponential rise in class action lawsuits, whereby a group of people who have suffered a common injury or loss collectively pools resources and finances, means that now, no organisation is untouchable.
Some of the biggest organisations worldwide have been weighed in the balance and found wanting over the last twenty-five years, and the threat of being held to account by a class action lawsuit has undoubtedly made a considerable impact on the behaviour and working practices of companies of every size and description.
Companies have been sued for a wide variety of issues, including:
With technological advances increasing the ability to bring together people from all over the world, combining resources for a common purpose has never been so easy to implement. Previously, many people with a common grievance would have no idea that others shared their issue, and the dissemination of knowledge and experiences would have been cumbersome and time-consuming. Class action lawsuits enable the development of an organised and effective campaign which has a significant chance of success.
Probably the most famous, and currently the largest class action lawsuit of all time, is the Tobacco Master Settlement Agreement of 1998, in which tobacco firms including RJ Reynolds and Phillip Morris agreed to pay $206 billion in settlement of cases arising from smoking-related illnesses. The involvement of public prosecutors meant that it wasn’t a traditional class action, but it had a major impact on the tobacco industry and its questionable marketing practices, and a knock-on effect on overall public health. The premise of the lawsuit, brought by over 40 US states, was that cigarettes manufactured by the tobacco industry contributed to the population’s ill health and, as a result, were a significant drain on public health systems. Prior to the class action, as the consequences of smoking on health began to be researched, over 800 individual claims had been launched against tobacco companies for negligent manufacturing and advertising among other charges. Only two were upheld and these were both reversed on appeal, so the eventual successful outcome of the class action lawsuit was a landmark result.
Aside from the states being able to recover tobacco-related healthcare costs, the tobacco companies committed to reduce or stop specific marketing approaches, particularly with regard to young people, pay annual amounts to the states to compensate for the cost of medical aid for smoking-related illnesses, fund an anti-smoking advocacy group, dissolve three tobacco industry lobbying groups and create and fund a foundation with the aim of reducing smoking and preventing smoking-related diseases.
The impact of this class action on smoking awareness and public health has been immense. According to the National Association of Attorneys General Center for Tobacco and Public Health, the settlement continues to have a profound effect on smoking in the US. Between 1998 and 2019, US cigarette consumption dropped by over 50%, and regular smoking by teenagers dropped from 36.4% in 1997 to 6% in 2019.
Class actions against companies on environmental, social and corporate governance (ESG) grounds are one of the fastest-growing areas of this type of litigation. In particular, many companies have been accused of ‘greenwashing’, a type of advertising or brand marketing where green credentials are trumpeted to demonstrate sustainability, whereas behind the scenes the company is doing very little to reduce its environmental impact.
The dramatic rise of environmental activism has helped call out greenwashing and companies are now liable to have any assertions minutely examined for genuine substance. One example which has just been announced is the agreement of Virgin Scent to pay out $3.08 million in a class action which claimed that its supposedly ‘natural’ and ‘chemical-free’ hand sanitisers contained unacceptably high levels of the carcinogenic chemical benzene. In the UK, a class action lawsuit is currently setting out to bring a claim against water companies for potentially unlawful discharges of sewage into rivers and seas. A number of car manufacturers have been targeted over emissions scandals which saw software deployed to circumvent pollution testing; VW was found to be guilty of this while simultaneously receiving green car subsidies and tax exemptions in the US.
Every class action has the benefit of shining a light on practices which should never have taken place, and helping to ensure other companies aren’t tempted to follow in their footsteps. Individual cases have brought about legislative changes, expedited ESG improvements, highlighted dangerous medical issues, drawn attention to negligence and lack of strategic action and called out unethical and unsound operations.
Class actions give a voice to every single consumer and, in holding organisations to account, has the impact of contributing to increased transparency and integrity in operations worldwide.
Here at Goal Group, our securities class action recovery service is a safe, secure and efficient way for shareholders to reclaim financial losses from companies where there has been fraudulent behaviour or inadequate management. If you are considering joining a class action lawsuit, contact us for expert and friendly advice and complete management of the entire process.
A class action is a lawsuit initiated by an individual or company on behalf of other individuals who have suffered the same harm or experienced similar financial loss. Class actions are powerful procedural tools to hold wrongdoers accountable for widespread damages caused to a group of victims, who individually may not have sufficient damages to support the cost of prosecuting on their own.
Typically, it can take from 18 months to three years to conclude, from filing to settlement and distribution. Not all class actions follow this timeframe, as much depends on the unique details of each case. Our client portal makes keeping up to date simple.
Class action notifications refer to notices sent from litigators to individuals, investors, banks, and companies to encourage participation in an ongoing class action case where compensation may be due. For many, keeping track of these opportunities can be overwhelming, which is why our alert notification system is valued by our clients, globally.
We are provided with a complex formula which is entered into our application to allow us to calculate the recognised loss. The formula takes many elements into consideration such as the holding period/class period, amount of shares, length of holdings and types of shares. When a client is on-boarded we request a specific set of data which then maps to the calculation in our technology and produces an estimate on the recognised loss based on a variety of specific criteria
Goal prides itself on its compelling and flexible pricing. So much so that it is one of the cornerstones of our business. Typically, Goal will charge a percentage per claim, which is purely contingent and paid upon receipt of the distribution. As the money is paid to Goal, we will usually deduct the percentage before paying the remainder to the client. The reason we offer proof of concepts is to enable us to be as competitive on pricing as possible. Our SaaS Accelerator application has an annual fixed price subscription available.
Fill out our enquiry form or call us today to find out if you or your client portfolio is eligible to participate. Our dedicated team are on the end of the phone, and with offices across EMEA, APAC and the Americas, we provide global coverage for securities class actions. Our powerful Traffic Light System can assist you by taking into consideration criteria clients have for participating and based on that and the case summaries we produce, we can provide a recommendation, graded as a traffic light.
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