Over charged by $10? Then you need a lawyer costing $1.44M

Hertz car hire has some nice cars

This morning the postman dropped a letter through my door from a US attorney in the case of Sobel et al v The Hertz Corp et al, which was sent to me by my in-laws who are asking me what they should do about it.

Basically, the notice informs customers of Alamo Rent a Car that they could be entitled to compensation for a charge that was erroneously added to a number of bills between 2007 and 2009.  This is called a class action and it seems that my in-laws must actively exclude themselves from the action to avoid having anything to do with it.

According to the notice three teams of attorneys have worked tirelessly on this case for four-years and will be claiming fees that come to a little over $1.4M from the defendants.  The total compensation they have negotiated is one $10 voucher off any future car rental taken in the next 18-months per customer.

Brilliant, so for a fee of $1.4M they have negotiated a settlement worth $10 to each person in the class action; is that a proportionate fee for the benefit to their clients?  In bringing this action, they have also taken up time over the past four-years of a Nevada state judge who acted as mediator in this case.  I'm sure people hear about these stories from the US and form opinions that all lawyers the world over take cases that any sensible individual would be told, "looks it's terrible that they overcharged you but is it worth your effort and expense suing these people?"  In this country, a complaint to trading standards would probably be a better and more proportionate response than lawyering up.

We don't have class actions like this in England and Wales and I was always taught that they are a bad thing, although having seen the bill in this case I'm starting to come around to the idea of introducing them!

Incidentally, I recently damaged my car while driving out of my son's nursery on a steel plate that had been installed on a speed bump by the gate.  I was more than a little surprised when everybody who read my tongue-in-cheek status update on Facebook told me to sue the nursery.  The repair cost me a few hundred pounds and maybe I could have sued - but where would it get me?  I get my money back, the nursery, which is already being considered for closure, has to pay out more money it can ill afford.  Potentially, the nursery closes, my little boy can no longer go to a nursery he loves and we have to send him somewhere that came a distant second when we were choosing a place for him.  People believe the adverts when they say "where there's blame there's a claim".  Yes, there maybe a claim, but rushing to law is not always the best way of settling a dispute.

UPDATE 1 October 2015

I updated this post in light of the news that as of today class actions, like the one described above, will be possible here in England and Wales (sorry I've no idea if they can be brought under Scottish law).  The English law will be more restrictive, allowing class actions in limited circumstances and only with the approval of the Competition Appeal Tribunal.