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Auctioning Class Settlements, Jay Tidmarsh

Jay Tidmarsh

Although they promise better deterrence at a lower cost, class actions are infected with problems that can keep them from delivering on this promise. One of these problems is the issue of agency cost, in which the agents of the class (the class representative and class counsel) advance their own interests at the expense of the class. Controlling agency cost, which often manifests itself at the time of settlement, has been the impetus behind a number of class-action reform proposals.

This Essay develops an idea that, in conjunction with reforms in fee structure and opt-out rights, controls agency costs at …