Re:Robot lawyer DoNotPay now lets you ‘sue anyone’ via an app
by rayiner on Thursday October 11, 2018 @01:12PM
(#18195226)
> The problem is the whole system is designed from the perspective of the lawyers rather than the customers.
If a company overcharged me $10 for a product, then as part of the settlement I should get at least $10. The company should also have to pay punitive damages, some of which could be used to pay the lawyers.
The lawyers would love this, because they work on contingency and would get paid more of their clients recover more.
> Instead we get a system where the total damage amount is often less than the company's profits on their illegal activity.
That's because the system is set up to protect the defendant. Absent exceptional circumstances, there are no punitive damages, so the most you can recover is, e.g. the amount of the overcharge. Then it is reduced from there to account for other factors. For example, damages are measured by the wrongful profits, not the total profits. If you sell a $1,000 laptop and make $100 profit, and you've engaged in price fixing, the $100 profit isn't on the table, only the difference between the $1,000 price and the hypothetical price in the absence of price fixing. The defendant's expert then says the price fixing only resulted in prices going up by $3, and the plaintiff's expert says it was more like $50, and the jury picks $5, because jury trials are usually held where the company has a presence and juries don't like to punish local companies. Meanwhile, there is a possibility that you get nothing because of various legal technicalities, which are in themselves justified but in the aggregate create a minefield to recovery.[1] So when the company offers to settle for $4, you jump on it.
[1] It's deeply rooted in the law that defendants should not pay for harms that were not caused by their conduct. So say you're a laptop manufacturer that engaged in price fixing. Plaintiffs present evidence showing that prices went up $50 after the price rigging meetings started. But it just so happens that around the same time a tsunami wiped out DRAM factories in Taiwan. Even if you have executive after executive testify "yeah, we totally were trying to raise prices by entering agreements with competitors," your damages expert can still carry the day by convincing the jury that your price fixing wasn't the culprit and that parts shortages caused by the tsunami were responsible for almost all of the increase in prices.
The lawyers would love this, because they work on contingency and would get paid more of their clients recover more.
> Instead we get a system where the total damage amount is often less than the company's profits on their illegal activity.
That's because the system is set up to protect the defendant. Absent exceptional circumstances, there are no punitive damages, so the most you can recover is, e.g. the amount of the overcharge. Then it is reduced from there to account for other factors. For example, damages are measured by the wrongful profits, not the total profits. If you sell a $1,000 laptop and make $100 profit, and you've engaged in price fixing, the $100 profit isn't on the table, only the difference between the $1,000 price and the hypothetical price in the absence of price fixing. The defendant's expert then says the price fixing only resulted in prices going up by $3, and the plaintiff's expert says it was more like $50, and the jury picks $5, because jury trials are usually held where the company has a presence and juries don't like to punish local companies. Meanwhile, there is a possibility that you get nothing because of various legal technicalities, which are in themselves justified but in the aggregate create a minefield to recovery.[1] So when the company offers to settle for $4, you jump on it.
[1] It's deeply rooted in the law that defendants should not pay for harms that were not caused by their conduct. So say you're a laptop manufacturer that engaged in price fixing. Plaintiffs present evidence showing that prices went up $50 after the price rigging meetings started. But it just so happens that around the same time a tsunami wiped out DRAM factories in Taiwan. Even if you have executive after executive testify "yeah, we totally were trying to raise prices by entering agreements with competitors," your damages expert can still carry the day by convincing the jury that your price fixing wasn't the culprit and that parts shortages caused by the tsunami were responsible for almost all of the increase in prices.