Cutting Class Action Agency Costs: Lessons from the Public Company
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Date
2020
Authors
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Journal ISSN
Volume Title
Publisher
University of California at Davis Law Review
Abstract
The agency relationship between class counsel and class members in Rule 23(b)(3) class actions is similar to that between executives and shareholders in U.S. public companies. This similarity has often been noted in class action literature, but until this Article no attempt has been made to systematically compare the approaches taken in these two settings to reduce agency costs. Class action scholars have downplayed the importance of the public company analogy because public companies are subject to market discipline and class actions are not. But this is precisely why the analogy is useful: because public companies are subject to market discipline, the tools they utilize to reduce agency costs are more likely to be efficient. This
Article looks to those tools as inspiration for class action reform, proposing several novel ways to improve current practice.
Description
article published in a law review
Keywords
agency, class action, public companies
Citation
54 U.C. Davis L. Rev. 337 (2020)