Alison Frankel writes:
A year ago, representing the “victims” of corporate privacy breaches seemed like a decent business model. In a very instructive chart Reuters prepared in June of 2011, my colleague Terry Baynes detailed the outcome of six privacy breach settlements, in which class action lawyers sued companies whose customer information was hacked. Most of the settlements involved payments to name plaintiffs ranging from $250 to $10,000. Other class members usually received no cash — but their lawyers were awarded between $500,000 and $6.5 million. Yes, we all know the lawyers had to work for their money. They filed complaints, probably withstood motions to dismiss, and negotiated settlements that included some kind of promise that defendants would change troublesome behavior. They also had to have their fees approved by federal judges.
But I believe Baynes’ chart may well represent the high point for contingency-fee lawyers who engineer settlements with no tangible benefit for class members.
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