136 / 322
GAZETTE
JULY/AUGIJST
19
• A complete listing of constitutional cases would be
very time-consuming. It has been said that every
important public issue in America ultimately finds
its way into the courts. Indeed, the principal
responsibility of the highest court in the land, the
United States Supreme Court, is to decide constitu-
tional cases.
(0 Let me move from substance to procedure. An
important procedural device that is used in American
courts is the
class action.
In a class action, one of the
parties acts, not only for himself, but for other persons
similarly situated, who are not named separately as
parties and are not represented by separate counsel. All
members of the class are bound by the final judgment, as
fully as if they were named parties.
There are many kinds of cases that can be brought as a
class action.
• Claims arising from an airline crash or train wreck,
or other major disaster, for example, will likely be
brought as a class action. In Kansas City a walkway
in a newly constructed hotel collapsed, killing or
injuring hundreds of people. As you know, the
liability issues in a case like that are enormous.
There are claims, or potential claims, against the
ownership of the hotel, the management of the
hotel, the architect, the engineer, the contractor,
and who knows how many subcontractors. And
those liability issues are identically the same, for
every person
who was injured or killed by the
collapse of the walkway. The class action device
permits all of those liability issues to be tried in one
case instead of hundreds of cases. The time and
effort of only one trial judge and one jury will be
required. And on the plaintiffs side, there will be
just one group of trial counsel, instead of hundreds.
In the case I have just cited — the major disaster
case — the damages issues are individual, not
common, to the members of the class. They may be
disposed of in separate mini-trials after — and if —
there has been a plaintiffs verdict on liability in the
class action trial. As a practical matter, once
liability has been established, the damages claims
probably will be settled and mini-trials will not be
necessary.
• Any case in which
class
of people have claims
arising out of the same fact situation is a candidate
for class action treatment. Products liability cases,
securities fraud cases, antitrust cases — any type of
case that meets the class action requirements can be
brought as a class action. This, of course, includes
the constitutional cases that I referred to just a
moment ago.
(g) A particular feature of American law practice
makes class actions feasible, as a practical matter.
• What I refer to is the so-called "common fraud"
rule, which is a rule requiring every member of a
claimant class to pay his fair share of expenses,
including attorney's fees, before receiving any
portion of the proceeds of the case. Take, for
example, a case in which the claimant class consists
of two or three thousand people, each of whom has
a claim of two or three hundred dollars. If the case is
successful, the recovery for the entire class will be in
the hundreds of thousands of dollars. The
attorney's fees to accomplish that recovery will run
in the ten of thousands, perhaps up to a hundred
thousand dollars — far beyond the financial interest
in the case of any one member of the class. Unless
the person who is contemplating bringing a class
action can compel the class members to contribute
to his attorney's fees, the class action will never be
brought. In America the "common fund" rule
permits a class action plaintiff to do this.
• The rule in this country and in the United Kingdom,
I understand, is different. In your practice, a class
action plaintiff cannot compel class members to
contribute to his attorney's fees. Each member of
the class is entitled to his full share of the proceeds
of the case, without offset for expenses. Under these
ground rules, a class action simply is not feasible.
• So, once again, we have a practice in America,
which is an incentive to litigation. And we have a
different practice here and in the United Kingdom,
which is a disincentive to litigation.
(h) Before leaving the subject of procedure, I should
comment on the rules for
pretrial discovery
in American
practice.
• Discovery in America is extremely liberal, much
more so, I believe, than here and in the United
Kingdom. The test of discoverability is not the trial
standard of admissibility in evidence, but whether
the information sought is "reasonably calculated to
lead to the discovery of admissible evidence".
Methods of discovery include: oral depositions, of
parties and of non-party witnesses; production of
records; written interrogatories; and medical
examinations, in appropriate cases.
• If there is a case to be made, a diligent lawyer in
America does not lack means to ferret out the
evidence.
(i) One further observation about the legal system in
America: legislative bodies in America have a tendency
to enact statutes encouraging what are known as "private
attorney general" actions. They do this as a means of
furthering some perceived public interest.
• Let me cite two examples. The American antitrust
laws prohibit "combinations in restraint of trade",
by which we mean arrangements that will interfere
with free and competitive markets. These statutes
give a private right of action to any person who has
been injured by a combination in restraint of trade,
and provide that his damages will be equal to
three
times
his actual loss. This treble damages feature is
intended both to penalise the wrongdoer, and to
encourage the bringing of antitrust actions by
private parties. The legislative scheme relies heavily
on private initiatives, to accomplish a public
purpose.
• The Securities laws, which require full disclosure of
information concerning publicly traded securities,
are another example. These statutes give liberal
rights of action to private investors injured by false
or incomplete disclosures, as a means of furthering
the public interest in the integrity of financial
markets.
128