Focus on technology: the role of legal tech in facilitating class actions
Class actions involve complex logistics, but many processes are capable of commoditisation and automation. Legal tech is assisting claimant law firms in maximising efficiencies, allowing them to bring larger claims and to bring claims more quickly than previously. Steve Shinn, CEO of FinLegal, explains more.
Introduction of new class action mechanisms and the growth in the litigation funding market undoubtably play a role in the growth of class actions. However, the emergence of new technology that allows claims to be managed at a fraction of their previous cost is, in my opinion, the most important reason why class action lawsuits are going to become established and normal across the world.
Recent innovations in super-fast networks, digital ledgers, and automation are coming together to revolutionise how business is conducted and the management of huge amounts of data. It's absolutely logical that legal tech is transforming mass litigation too.
Twenty years ago, it would have been prohibitively expensive for a law firm to distribute an award to 200,000 Volkswagen owners. Most lawyers would not consider the Dieselgate case, and those that did would struggle to get backing from a funder. LegalTech has changed that.
Barriers to engagement
One of the challenges of group actions is engaging and maintaining engagement, with claimants. This is true for both book-building an opt-in claim, at the distribution stage of an opt-out claim.
Newspaper, radio and TV adverts and social media adverts are expensive. When potential claimants do engage, the sheer number of individuals concerned brings logistical challenges.
Well-designed digital forms allow claimants to sign up in an instant. FinLegal’s tool allows a claim to be signed up in two minutes, and a payment collection form can be completed in just over a minute. Our tech tools help in engaging and communicating with the group cost effectively , keeping them informed and interested. The rapid sign-on process is key to maximising claim participation and helps to build the class size.
Cost of administration
Technology has transformed the economics of class action. We no longer need call centres full of claims managers. Claimants now self-serve via the internet. Using management-by-exception a single person can effectively manage a book for 50,000 claimants or more. Without technology, this would have been unimaginable even five years ago.
Finally, modern litigation is becoming increasingly data centric. Class actions aren't an exception. Legal tech makes data analysis much more effective and affordable.
By significantly reducing costs, tech is making thousands of claims viable for lawyers and funders. Tech alone is turning a specialist area of litigation into a much larger market that aids regulation and provides access to justice and redress for millions of people.
This article was first published in CMS’s European Class Actions Report 2022. You can download the full report here.