Document Type



Economics of Class Actions, 9 Kansas J. of Law & Pub. Pol. 481 (2000)


Actually, I'm just a setup act for Chris Buckley. He is going to be making the principal presentation on this panel. I'm going to start by talking about some very simple economic features—I would not even call them principles—but features of class action litigation which you're all aware of. I have two basic points to make.

Let me lead up to the first one. The economics of class actions are pretty simple. As you all know and everyone knows, class actions serve the purpose of aggregating common claims. This creates something of an economy of scale, hopefully, whereby a large number of claims can be resolved with, supposedly, greater efficiency and greater dispatch than resolving each of the claims individually. This would be especially true and it has been true with class actions which involve claims that are small on their face and that might not justify individual litigation but which, when joined as a class, become worthwhile to litigate. Although this point is often made, the economy of scale argument does not apply only to small claims. There is no reason not to realize economies of scale of large claims just as of small claims, but oftentimes for reasons we will talk about later, there are grounds that may caution against aggregating large claims in a class. There are broader issues with regard to aggregation itself.

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