Class-Actions Spike in 2007, Driven by Subprime Litigation
If you want to make money from the subprime mess, it appears that it would pay to be a class-action attorney. Litigation tied to the demise of subprime lending is driving an increase in class-action filings, according to a report released Friday by NERA Economic Consulting. 198 class-action cases have been filed in total through December 15, according to the report, with 38 being subprime shareholder class actions. There were a total of zero such cases during 2006. "Because subprime lending cases are already springing up across several Federal Circuits," the report's authors said in a press statement, "and as the crisis in the credit markets continues to deepen and the market for subprime mortgages continues to suffer accordingly, more litigation is likely to follow." The average settlement paid to resolve a shareholder class action case in 2007 was $33.2 million, NERA Economic Consulting said, up nearly 50 percent from 2006. The median settlement also reached a new high in 2007, at just under $10 million.