U.S. Chamber Institute For Legal Reform Issues Report About Class Action Lawsuits In The U.S.

By | Business Litigation, Class Action Lawsuits, Statistics

The U.S. Chamber Institute for Legal Reform (“ILR”) issued a report on October 26, 2018 entitled “A Rising Threat: The New Class Action Racket That Harms Investors and the Economy” in which it opines, “The securities class action system is spinning out of control. Abusive lawsuits are imposing huge costs on investors without providing any benefit. The only winners are the lawyers, who take home millions of dollars in fees. And we have seen this movie before.”

The ILR report states: “Securities class action filings are increasing dramatically, reaching levels not seen since enactment of the 1995 reform law. The numbers tell the story. Filings in 2017—415 or 412, depending on the particular study being examined are:

• More than 50% higher than 2016’s total number of filings;
• More than double the average annual case filings over the past twenty years (193 cases); and
• Against 8.4% of all U.S.-listed companies—more than double 2014’s percentage of 3.5%—which means one out of every twelve public companies was sued in a securities class action in 2017 . . .

annual filings for 2008 through 2016 ranged from 151 to 271, with an average per-year filing number of 190. But in 2017, filings increased to 412—a 122% jump over the per-year average—and will stay at that unprecedented level for 2018.”

The report states that the last eight years have seen a surge in lawsuits challenging merger and acquisition transactions, which is known as “M&A litigation.” In 2009, only 15% of M&A deals over $100 million triggered federal court lawsuits but in 2017, 74% of M&A deals over $100 million triggered federal securities lawsuits.

The report continues: “From 2003 through 2008, less than half of deals valued at $100 million or more were met by a lawsuit. In 2009, that almost doubled—to 76%. From 2010 through 2014, more than 90% of all such deals attracted a lawsuit—with a high of 96% in 2013. Last year, suits targeted 85% of deals … a study of M&A cases from 2003-2011 found that the overwhelming majority of cases were settled (72%) and 77% of settlements provided for disclosure only. Yet the average attorneys’ fee for these cases was $749,000.”

The report states, “For M&A class actions from 2012-2016: Lawyers got nearly two-thirds of the total payments in cases settled or dismissed (both plaintiffs’ and defense lawyers), with only 39% going to shareholders—of course, the overwhelming majority of cases resulted in disclosure-only settlements with only a few cases with shareholder awards responsible for the 39%.”

The Delaware Chancery Court wrote in a case it decided in January 2016 “disclosure settlements are likely to be met with continued disfavor in the future unless the supplemental disclosures address a plainly material misrepresentation or omission.”

Securities law claims filed in federal court targeted 20% of litigated deals in 2015 but increased to 87% in 2017 (state court filings targeted 80% of the litigated deals in 2015 but only 13% in 2017). In 2017, 89% of all cases were dismissed and 75% involved payment of a “mootness fee” to the plaintiffs’ lawyers (i.e., the defendant unilaterally added new disclosures to address the alleged  “deficiencies” cited in the class action complaint, which moots the claim but the defendant pays a “mootness fee” to the plaintiffs’ lawyers in return for dismissal of the case).

The report states that a significant and growing number of event-driven class action claims target biotech, pharmaceutical, and other medical companies: 85 securities class actions were filed against these companies in 2017, compared to 27 such cases filed in 2012.

The report states: “Securities class actions are almost never resolved by a decision on the merits of the underlying claim. Cases that are not dismissed are virtually always settled—because the costs of litigation are high and these cases threaten hundreds of millions, if not billions, of dollars in possible liability.” From 1997 through 2014, only 14 cases went to trial, compared to 3,938 cases resolved by dismissal or settlement over that period.

The report blames plaintiffs’ lawyers for the uptick in securities class action lawsuits: “For all securities class actions during that period the results were not much better: Lawyers continued to do well, reaping 43% of the total payments, with shareholders getting 57%. The average cost per case was $11.9 million. Plaintiffs’ lawyers got $2.3 million and defense lawyers $2.9 million. Even the relatively small percentages of funds that are paid to shareholders provide no net benefit to investors, because the undisputed reality of securities class actions is that they typically accomplish nothing more than shifting money from one innocent investor to another—with huge transaction costs paid to lawyers.”

The report also claims that the mere filing of lawsuits like securities class actions wipes out, on average, 3.5% of the defendant company’s equity value.


What the report fails to discuss are the abuses and wrongdoings committed by some publicly traded companies that harm stockholders, consumers, and others, and which wrongful acts would not become known to the public but for class action lawsuits filed against them, which also serves as a strong deterrent to bad behavior in the future.

If your business is presently or may soon be involved in class action litigation in the United States, email us at or telephone us toll-free in the United States at 800-756-2143 to find class action lawyers who may handle your class action litigation matter on a contingency basis. – The Practical Solution For Business Litigation

Hourly Rates Charged By Florida Lawyers

By | Attorney Hourly Rate, Statistics

The Florida Bar’s “Results of the 2016 Economics and Law Office Management Survey” found that over three-quarters (81%) of respondents list their hourly rate as being over $200, while over one-third (36%) list their hourly rate as being over $300. The survey also found that the percentage of attorneys who charge an hourly rate in excess of $300 has increased significantly since the previous 2010 survey (from 14% in 2010 to 36% in 2016).

The survey results indicated that the Southeast Region of Florida (70%) contains the highest percentage of respondents who charge an hourly rate of over $250. The North Region (31%) contains the highest percentage of respondents who charge an hourly rate of $200 or less.

Of those respondents who reported having a standard hourly billing rate, over two-fifths (44%) reported it has increased over the past two years, compared to 3% who report it has decreased. Over half (53%) reported their standard hourly billing rate has remained the same over the past two years.

55% of the respondents reported that they expected their standard hourly billing rate to stay the same in 2007; 29% reported they expected to increase their standard hourly rate in 2017; and, only 2% stated that the expected to decrease their standard hourly rate in 2017.

31% of the respondents reported that the hourly rate billed for legal work performed by paralegals in their firm is between $81 and $100, while 49% reported that the billed paralegal hourly rate is over $120.

59% of the respondents reported that their law firm or legal office uses an hourly rate as the primary method for billing, while 17% reported that their firm or legal office uses a combination of methods.

33% of the respondents reported that their firm or legal office handles contingency fee cases. Of those who accept cases on a contingency fee basis, the majority reported that these types of cases comprise one-quarter or less of the total number of cases they handle.

76% of the respondents receive 33% to 40% of the award in victorious contingency fee cases, which is an increase from 68% who reported the same in 2014.

34% of the respondents expected the demand for paid billable lawyer services in their area to either significantly or somewhat increase within the next five years, compared to 12% who expected it to significantly or somewhat decrease within that time frame.


If your business is presently or may soon be involved in business litigation in the United States, email us at or telephone us toll-free in the United States at 800-756-2143 to find business litigation contingency lawyers who may handle your business litigation matter on a contingency basis. – The Practical Solution For Business Litigation