Update
Class Actions Provide Better Access to Justice
SUPPORT: HB 449 (Del. Simon), SB 229 (Sen. Surovell)
Published / By James W. (Jay) Speer, Esq.
The Virginia General Assembly passes laws to properly regulate marketplaces and protect individuals, but many times those laws are not effectively enforced because government agencies may lack the necessary resources. Class actions create incentives for lawyers to bring private enforcement actions to help a group (or “class”) of individuals who were harmed by a business’ practice. Though the amount by which an individual was harmed could be too small to make a lawsuit worthwhile, a class action can aggregate many claims so that there is a significant total amount at stake – enough to make litigation economically feasible.
Class actions are also an efficient way to handle systemic issues: even when individual claims are large enough to be pursued on their own, it takes more judicial and legal resources to handle multiple lawsuits, and those individual lawsuits cannot ensure relief for even the people who do not file their own lawsuit.
Class actions are a way of leveling the playing field for poor or economically less powerful individuals who are seeking justice.
But, in 2024, Gov. Youngkin vetoed legislation that would have allowed state-law class actions in Virginia.
Virginia and Mississippi are the only states in the country that do not allow class action lawsuits. Virginians are deprived of their right to use the courts to seek relief for a violation of their rights if the cost of litigation exceeds the potential benefit. Therefore, claims that are too small to cover the cost of litigation are simply not pursued in court, resulting in underenforcement.
The class action device can create a market for private enforcement of the law. Increased enforcement creates improved incentives for companies to comply with the law and take the appropriate degree of care.
Case Study:
Why Virginians Need State-Law Class Actions
The 2002 General Assembly passed legislation allowing payday lending in Virginia but prohibited payday lenders from getting people into a debt trap by renewing or rolling over their loans. Payday lenders ignored this part of the law and many people went to legal aid programs across the state for help. Numerous individual lawsuits were filed against the payday lenders.
One of these cases made it to the Virginia Supreme Court which unanimously ruled that trapping an elderly Social Security recipient into 33 straight monthly loans was a violation of the law. This client got justice, but millions of Virginians who were in a similar position with other loans were not affected because there was no mechanism to seek relief for all the other people stuck in the payday loan debt trap.
