New Jersey, March 22 2003 was the best year ever for
some class action lawyers and with the $325MM settlement in the Global
Crossing case, 2004 is also shaping up as an excellent year for these
attorneys, but many class action firms’ legal fees were down in 2003. Several
of these firms used RD Legal Funding’s settlement fee acceleration service to
solve their cash flow problems. In 2003, RDLF’s two largest class action
fundings were for $2.5 and $1 million dollars, but this is likely to increase
with RDLF’s new $10MM funding limit.
2003’s biggest cases
2003 was a great year for the firms involved in the 6 largest cases:
* Lucent $517MM
* DaimlerChrysler $300MM
* Oxford Health $300MM
* Mattel $100MM+
* DPL $100MM+
* Computer Associates $100MM+
The Lucent, DaimlerChrysler and Oxford Health class actions, and now
Global Crossing, are all in the top 10 of the largest securities class actions
of all time.
Average settlement down
For many other firms 2003 was a down year, as an article just posted on RD
Legal Funding’s website at
http://www.legalfunding.com/legalfunding/newsletter_display.cfm?iIssueID=29
shows. The median 2003 securities class action settlement was only $5.4
million, down almost $1 million from 2002. Many class action firms found that
the legal fees awarded in these small settlements did not cover their
expenses. Ron Dersovitz, President of RD Legal Funding, said, “Fees from
these smaller cases are the fuel that keeps many firms going. A drop of this
size in the average settlement creates cash flow problems even if expenses are
constant.”
Securities class action firms expenses up
Class action firms’ expenses, however, are not constant, but up
substantially for most firms. Over 1,000 securities class actions have been
filed in the last three years. Many of today’s cases are larger and more
complex, so expenses are up. For example the $80MM ERISA settlement in the
Global Crossing case is the largest ever; Global Crossing’s former chairman is
contributing $30MM in his personal capacity, and suits continue against Arthur
Andersen, Salomon Smith Barney, and Goldman Sachs.
RDLF raises funding limit to $10 million
Many of the other unresolved cases that grew out of the accounting and
ethics crisis are just as complicated so even some of the largest firms are
having cash flow problems. “RDLF has raised its funding limit to $10 million
to address the needs of the law firms handling these larger cases,” stated Ron
Dersovitz. “We expect cash flow problems to continue for class action firms
at least through the end of 2004.”
RD Legal Funding, LLC provides post-settlement cash flow acceleration for
class actions, mass tort litigation such as Fen-Phen, personal injury suits,
medical malpractice, employment discrimination, court appointed criminal
attorney matters, and other types of legal fees. They are headquartered in
Englewood, New Jersey.
For further information please contact:
Mark Pruner, VP – Marketing, RD Legal Funding, LLC
201-568-9007
mpruner@legalfunding.com
