The Associated Press provides an update on the fallout from the 2007 Ford Explorer rollover suit. When all’s said and done, the plaintiffs’ lawyers received $25 million for their time. The clients, not so much. “In exchange for dropping the lawsuit that alleged rollover problems unfairly diminished the resale value of Explorers, Ford customers could receive a $500 discount coupon toward the purchase of a new SUV or a $300 coupon to buy another Ford vehicle. Consumers had until April 29, 2008 to apply for the coupons . . . A report filed with the court in June showed just 75 coupons have been redeemed for a combined $37,500.” Ford spokeswoman Kristen Kinley said the settlement prevented the company from discussing the case. “We are pleased to have finally settled this case with the plaintiffs and to finally put this behind us,” Kinley said. “We are also pleased to hear that some people took advantage of the vouchers to purchase a new Ford Explorer.” I bet they are. Ford dodged a $500 million bullet, back when $500 million was real money. [thanks to The Walking Eye for the link]
At least a lot of those Explorers will be off the road after C4C.
There ought to be a law keeping class action lawyers from keeping 99% of the proceeds from a class action lawsuit.
In this case the lawyers get 99.85% if you value the vouchers at face value. If you are like me and consider them nearly worthless then the lawyers got an even higher percentage of the take.
Make the class action guys limit themselves to 50% of the take and either there will be some Hollywood accounting going on or they’ll just make sure that Ford ponies up $50M instead of $25 so they’ll still get the same take. I’d like to think it’d be the latter but even $25 million divided to 1 million customers is $25 a person. I’m not sure off the top of my head how to do the math to make it fit what I’d consider fair.
Another example of the court system in this country serving only the interests of the lawyers and no one else. Between this sort of thing and the rabid partisan tribalism that paralyzes politics we are poisoning the well upon which our society depends.
Sue Ford over the fact that their resale was diminished because of the rollovers? REALLY? What a stupid lawsuit! The resale value plummetted because there are somewhere around infinity-billion Explorers on the road. Want a used one? Take your pick and name your price. It’s what happens where there is a glut of anything out there. Get a freaking grip, seriously.
While system for serving justice is broken in many regards and this is definitely one of them, I don’t feel sorry for people who bought Ford Exploders. If you are dumb enough to give Ford or any american car company your money you may very well be willing to accept the consequences of your stupidity.
Solution to problem:
1) Gather up all lawyers
2) Place them on as many cruise ships as it takes to hold them
3) Send loaded ships out to the Mariana Trench
4) Dispatch the USS Ronald Reagan to the area
5) Allow the FA/18 Super Hornets to use the pest infested cruise ship flotilla as live target practice
6) Problem Solved
ps …. I have absolutley no use for these vermin
I don’t agree with racebeer. I think a much better use for those people would be to skin them to make expensive handbags. It would be the latest fashion statement.
Hey tauronmaikar, I Like That Too!!!!
You have to add-in the cost of all those tires that Ford replaced for free. My Explorer had 68,000 miles on it at the time of the recall and Ford replaced the tires for free. With the free replacement tires I never had to pay for tires during the entire 5 years I owned the Explorer.
Some clarifications:
If the lawyers got $25 million, that’s a combination of a standard 33% contingency fee plus any fees they were able to recover, which are sometimes allowed by statute. I really don’t know what the deal was in this case.
As for this settlement, Ford ended up with the kind all defendants prefer: claims made. What it means is that they will pay *up to* X dollars, but each member of the class has to request payment. They don’t just get a check in the mail.
Clearly this is working out great for Ford because they’ve paid out virtually nothing so far.
Meanwhile, the plaintiffs’ lawyers don’t take their 33% cut of the value of claims actually submitted to Ford. They take the 33% cut out of the maximum amount of X dollars that Ford authorized to pay if everyone came forward for a claim.
This is one of the many situations that plaintiffs lawyers have a conflict of interest with their clients’ interests.
I work on the other side of the table, in defense work. Then again, I certainly don’t have $25 million.
These aren’t rollover victims getting shafted with $500 vouchers (I assume they got substantially more).
These are just random Explorer owners, never involved in a rollover, looking to cash in for a few bucks.
They were dumb enough to buy a BOF truck as a family vehicle, and can’t find someone else dumb enough to take it off their hands. They got more than what they deserved, IMO.
I call misleading headline.
Uh, these are Ford Explorer owners involved in a class action lawsuit. They each get $500. Why is that misleading? I say it’s a great headline that did what it was supposed to; it pulled you in.
Ooh, 500 bucks. Like I probably couldn’t negotiate this off the price anyway.
This reminds me of an old joke:
Q. What do you call 10,000 lawyers on the bottom of the ocean?
A. A good start.
John
It’s really simple – each lawyer should get the same reward as a single member of the class action lawsuit. You could argue for a multiple of that, say 5x?
Racebeer: I like cruises, can you replace #2 with “yachts over 100 feet that serve no purpose except to stroke off the egos of billionaires?” Everything else I’m cool with.
tauronmaikar :
If you are dumb enough to give Ford or any american car company your money you may very well be willing to accept the consequences of your stupidity.
That’s a bit harsh – especially for those who enjoy used domestic iron. Don’t get me wrong, when it comes to buying new, the domestics are too risky – considering finances, warranties & depreciation.
But if the choice is between an Exploder and a Sequoia, both well maintained & 5 years old, I’ll take the Ford and pocket the $5-10K savings.
“It’s really simple – each lawyer should get the same reward as a single member of the class action lawsuit. You could argue for a multiple of that, say 5x?”
I remember reading on Overlawyered.com once of a class action suit in which the judge required the lawyers to take their pay in the same form as the class members. If the class members got a coupon, so did the lawyers.
fincar1 :
It’s really simple – each lawyer should get the same reward as a single member of the class action lawsuit. You could argue for a multiple of that, say 5x?
Imagine for a second that Goliath National Bank takes $500 out of the checking account of every customer because they feel like it. The customers don’t sue individually because it’s not worth their time to go to small claims court.
The question is whether a lawyer would take on a case that will take months, even years, of work for $2500.
Your point is well taken, but contingency fees are the competitive juice of the legal field.
We all rail on TTAC all the time about the government not intervening in the economy. This is a free contract between class members and lawyers. Sounds stupid, perhaps, but them’s the breaks.
I don’t want courts telling plaintiffs’ lawyers how much they can make any more than I want courts telling me what my salary can max out at.
In the world of tort this is relative small potatoes. Many lawyers receive huge fees for far less work than this case required. 500 dollars was a joke, especially when it flowed back into Ford’s lap. They probably wrote it back off as a tax deduction.
I never really bought the notion it was Ford’s fault the tires popped on their cars. Firestone had much more fault in their lap. It was the exclusion of reinforcement lines in the tread that caused separation. Ford’s crime was running the tires a tad lower in inflation and specifying C rated tires on the explorer in the first place. Not worthy of millions of dollars in damages since consumers could have used more air (or checked the tires more often) and not used the tires in the first place.
Now if it seems over the top to suggest an owner should up the inflation or use different tires, remember we are all intelligent adults and when it comes to personal safety we should look at the tires we ride on and inform ourselves about the equipment. But it seems easier to dig into the deep pockets of companies rather than do our own homework. I check my tires regularly, buy quality rubber suited for the car, and rotate regularly to maximize tire life.
If I wasn’t an informed consumer I could pocket money in lawsuits too.
I never really bought the notion it was Ford’s fault the tires popped on their cars.
Even if it were to some extent, the car was reasonably stable after a deflation as tested by car and driver. The rollovers were likely the result of overaggressive correction.
The lawyers then went on a massive PR spree to get Ford to pay up, which I guess also resulted in this suit here.
‘The first thing we do, let’s kill all the lawyers’. -Shakespeare
Maybe what is really lacking is driving instruction on what to do in the event of a tire failure. Instead of focusing on parallel parking and turn signals our testing should see if drivers know what to do in ice at night on narrow roads.
There have been so many lawsuits where the lawyers made millions and the class action participants got coupons for discounts. A famous suit against Sears netted 3 million + in cash for the law firm and a 10 dollar coupon in the mail for a few thousand people.
Bankruptcy clears the deck on a number of cases against Chrysler and GM. It outraged the people who make a living needling companies in the name of public safety. How much of each overpriced car sold new today reflects litigation costs? In the end we all pay for excessive tort and for the few cases that have merit plenty don’t.
I’ve never bought the notion that companies willfully and maliciously allowed their customers to suffer pain and death using their products. More likely they were victims of bad circumstance and unknown variables. But lawyers are masterful Monday morning quarterbacks and use any method necessary to convince a jury to award millions across the table.
Visit http://www.Overlawyered.com for more information
Does anyone who read this know anyone who was part of this class action suit or someone who used the voucher?
I’m working on a story for a National News show about how the lawyers got so much and the consumers got so little.