Understanding the Economics of Class Actions

Abstract

This chapter delves into one of the strongest arguments in favour of the access to justice potential of class actions, which can be found in the rational choice theory of orthodox economics. It explains the economic access to justice framework that is based on the recognition that the class action allows the pursuit of claims that would not be pursued by rational actors. It also talks about how class actions allow the pursuit of negative value claims or claims in which the value of the claim is outweighed by the costs of its pursuit. The chapter elaborates how allowing for ideological representatives to advance claims on behalf of harmed groups can contribute towards preventing injustices by deterring misconduct by potential wrongdoers. It explores important issues pertaining to the economics of class actions that impact the access to justice and are achieved through mass litigation.