Recently, I wrote an article questioning whether automobile class action lawsuits are good for the consumer. The article related to a proposed class action settlement concerning Honda Hybrid vehicles. In a nutshell, I argued that class action lawsuit settlements related to vehicles in which class members give up substantial potential damage claims for minimal damages should not happen.
A recent small claims court decision proves my point. A woman opted out of the Honda class action settlement and sued Honda on her own in small claims court. She won the case and the court awarded her just shy of $10,000.00 in damages from Honda. Had she stayed in the class action settlement, she would have received approximately $100.00 to $200.00. So I ask the questions – Who does the class action settlement benefit? Honda? Class Counsel? Class Representative? Given the amount of the settlement for the class members and the potential damages for individual claims (as evidenced by the small claims award), it is difficult to argue the settlement benefits class members.
Now Honda will undoubtedly appeal the small claims decision. Honda will be allowed to have counsel represent it in the small claims appeal. But the fact that a judge ruled in a consumer’s favor on the very claim that is subject to the class action settlement, evidences the negative aspect of class action settlements dealing with automobiles.
It will be interesting to see the outcome of the appeal.
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