Chapter 4 - Chapter 4 The Legal Framework for Business...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
The Legal Framework for Business Class-Action Fairness A class action suit groups a number of small plaintiffs, as many as hundreds of thousands of them, to allow for efficient processing under one lawsuit. Class Action Fairness Act of 2005 o Before the reform, many companies facing such an action, whether it involved a family medication or a defective TV, complained that plaintiffs’ lawyers shopped around for sympathetic courts. The Class Action fairness act of 2005 imposes certain restrictions on such suits. o First, it automatically moves the most large, multi-state class actions— those with potential damages exceeding $5 million and in which more than two-thirds of the plaintiffs are geographically dispersed—from state courts into federal courts. This restriction prevents “shopping around” in different states for sympathetic courts but lets cases that belong within a particular state remain there. o Second, judges must consider the actual monetary value of any damage done so that plaintiffs receive true compensation for injury instead of large —and perhaps arbitrary—awards. o A third major provision of the law affects the way attorneys receive payment for their legal representation. Under the old system, an attorney would usually receive a percentage of the cross settlement amount, regardless of whether all plaintiffs bothered to collect. Now judges can require that any uncollected rewards be given to charities or government organizations, and attorneys may not include those rewards in calculating their fees. Also, if the attorney’s fee was not based on a percentage, then it must be based on time actually spent working on the case. Finally, the act ensures that plaintiffs’ interests are protected equally with their lawyers’. Legal System and Administrative Agencies The judiciary, or court system, is the branch of government responsible for settling disputes among parties by applying laws. This branch consists of several types and levels of courts each with a specific jurisdiction. Court systems are organized at the federal, state, and local levels. Administrative agencies also perform some limited judicial functions, but these agencies are more properly regarded as belonging to the executive or legislative branches of government. Trial courts- courts of general jurisdiction At both the federal and state levels, federal courts hear a range of cases. Unless law to another court or to an administrative agency assigns a case, a court of general jurisdiction will hear it. o Majority of cases, both criminal and civil, pass through this court o Within the federal system, trial courts are known as US district courts, and at least one of these courts operates in each state. In the state court systems, the general jurisdiction courts are often called circuit
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/03/2008 for the course BUS 101 taught by Professor Rollins during the Spring '08 term at Miami University.

Page1 / 10

Chapter 4 - Chapter 4 The Legal Framework for Business...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online