Article by Charles Silver
This Article argues that the due process imperative to minimize conflicts in class actions requires judges to use percentage-based compensation formulas in common fund cases. The conclusion reflects the broad consensus that percentage-based formulas harmonize the interests of agents and principals better than time-based formulas like the lodestar approach. This is as true for class counsel and absent plaintiffs as for lawyers who represent signed clients. Academics, judges, and others who continue to support the lodestar method do so for reasons of legal ethics or professionalism, not because the lodestar minimizes principal-agent conflicts. This defense of the lodestar is fatally flawed, however, because the Due Process Clause trumps state bar rules. The option of using state bar rules to build avoidable conflicts into class actions is closed.
About the Author
Charles Silver. Cecil D. Redford Professor, University of Texas School of Law. B.A. University of Florida; M.A. University of Chicago; J.D. Yale Law School.
Citation
74 Tul. L. Rev. 1809 (2000)