Class-action lawsuits have “been turned upside down” by the arrival of a long-awaited federal bill that many proponents hope will give little-guy plaintiffs more power and meaningful victories against large and obviously better-heeled business interests.
The rule was rolled out with some fanfare early last week by the federal Consumer Financial Protection Bureau. It responds to years of reported consumer emasculation in efforts by aggrieved customers to hold large financial firm accountable for wrongdoing in contractual matters.
The rub for many consumers has long been this: When they see wrongdoing on the part of a large financial institution (for example, a bank or credit card issuer they have contracted with), they discover that the fine print in their executed agreements bars them from seeking a legal remedy though formal litigation in a court.
Instead, their sole avenue for pursuing a grievance is through mandatory arbitration, which is a private arrangement often perceived as unduly benefiting corporate defendants much of the time.
The CFPB’s newly announced rule seeks to better equal the playing field, which is exactly what many commentators say it will do. Plaintiffs now can join other like-minded consumers with a common complaint in filing class-action lawsuits against entities they contend have acted unlawfully.
By all indications, though, it is definitely too soon for adherents to applaud or schedule a celebratory parade. As one article on the rule notes, “the fight to save or kill it has just begun.”
That is because the rule has many and powerful critics who can pursue several strategies to weaken or completely eliminate it.
Time will tell regarding its fate. We will keep our readers across Connecticut and elsewhere duly informed regarding material details that might surface concerning the bill’s future status.