Tuesday, December 27, 2011

Cutting the lawyers out of the legal equation?

I'm intrigued by a California woman's decision to sue a motor vehicle manufacturer in the Small Claims Court, rather than follow the 'traditional' route of participating in a class action lawsuit. The Los Angeles Times reports:

Heather Peters is an angry consumer who knows she has little chance of winning a war with Honda Motor Co. and its army of high-priced lawyers.

The Los Angeles resident is miffed that her 2006 Honda Civic hybrid doesn't get its claimed fuel economy. And she isn't satisfied with a proposed class-action lawsuit settlement that would give trial lawyers $8.5 million while Civic owners would get as little as $100 and rebate coupons for the purchase of a new vehicle.

But Peters believes that she found a venue where she can win justice and where Honda can't spend a single dollar on legal help.

On Jan. 3 she'll take her case to Small Claims Court in Torrance, where California law prohibits Honda from bringing an attorney. She's asking for the maximum of $10,000 to compensate her for spending much more on gasoline than expected. Honda said the Civic would get about 50 miles per gallon, but because of technical problems the car gets closer to 30 mpg.

What's more, Peters is using urging Honda owners across the country to do the same. Peters' DontSettleWithHonda.org website and a DontSettleWithHonda Twitter account include a link to state-by-state instructions for filing these lawsuits, which have low fees and minimal paperwork. Honda sold about 200,000 of the hybrids over a six-year period, and because of resales, as many as 500,000 people are eligible to file claims against Honda.

"I want them to know they can file in Small Claims Court and that it is not so scary," Peters said.

If she's successful in getting others to follow her example, Peters could inspire a whole new litigation strategy in the auto industry and other businesses. Working together but filing lawsuits independently, consumers could force companies to go mano a mano with individual plaintiffs in far-flung courtrooms nationwide.

Call it a small-claims flash mob.

There's more at the link. Bold print is my emphasis.

One of my biggest objections to so-called 'class action' lawsuits is that the lawyers involved typically pocket enormous sums of money, while the members of the 'class' they represent usually get much smaller sums, frequently not enough to fully compensate them for their losses. Also, the terms of the settlement frequently give cash to the lawyers, but settlements in kind, not in cash, to the members of the 'class' (as mentioned above, where the major element of the settlement would be rebate coupons towards the purchase of another Honda - if you don't want to buy another Honda, the coupons are basically worthless to you).

I think Ms. Peters' approach is intriguing. Small Claims Court isn't an 'easy ride' for the plaintiff; losses still have to be proved, and accounted for, so it's not likely that there'll be a rush of fraudulent or speculative claims. However, by cutting the (very expensive) lawyers out of the loop, consumers might actually get something worthwhile for their trouble.

I'll be watching this case with great interest. I'm willing to bet that trial lawyers will, too!



WR Olsen said...

I wark as a mediator and volunteer in small claims court. The monetary limits are different for each state (for example in Kansas the limit is $4000) Small claims is an interesting way to fight the class action monster.
Many large companies refuse to participate in small claims actions and when the plaintiff winds by default the appeal to a higher court and force the plaintiff to hire an attorney.

WR Olsen said...

Please excuse my many spelling errors in the previous note. Small Claims is really a good way to resolve disputes but can be abused.

Gregory said...

Mr Olsen, you are not by chance the same Olsen who is an attorney at the firm of Fisher, Olson & Juntunen, Ltd.??????

Can't have people cutting out the attorneys can we?


Rich said...

I doubt it. He spells his name differently.

BTW, what is so offensive to you about his post?

dave said...

Depending upon the state, the defendant also has the option to remove the suit to a full trial court; Ohio is such a state. Additionally, many states (incl. Ohio and Oklahoma) allow parties to be represented by lawyers even in small claims court.

Ms. Peters is able to do this only because of a peculiar confluence of state civil procedure laws. In order to pull it off, the forum state must BOTH a) forbid lawyers in small-claims, and b) forbid transfer to the conventional court.

Old NFO said...

That IS an interesting option... :-)