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http://ssrn.com/abstract=1741623
 
 

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Reverse Sampling: Holding Lotteries to Allocate the Proceeds of Small-Claims Class Actions


Shay Lavie


Tel Aviv University, Faculty of Law

December 1, 2010

George Washington Law Review, Vol. 79, 2011

Abstract:     
Small-claims class actions pose a unique dilemma: individual awards are small, and it is often not feasible to distribute them to each and every plaintiff. Courts have devised several alternative allocation procedures to cope with this problem, but none is satisfactory.

This Article proposes a different method: paying more money to fewer, randomly sampled, claimants. As each individual award entails per-claim administrative costs, using lotteries to distribute the proceeds of small-claims class actions cuts these expenses. The Article demonstrates that this method is superior to all existing alternatives. It funnels the money back to the group of victims, achieves deterrence, and maintains administrative efficiency. Finally, the Article shows that randomization is a fair allocation mechanism as all class members are equally treated, and that the use of lotteries in this context raises no legitimacy concerns.

Number of Pages in PDF File: 38

Keywords: class-actions, lotteries, civil procedure, remedies

JEL Classification: K40, K41

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Date posted: January 17, 2011 ; Last revised: June 22, 2011

Suggested Citation

Lavie, Shay, Reverse Sampling: Holding Lotteries to Allocate the Proceeds of Small-Claims Class Actions (December 1, 2010). George Washington Law Review, Vol. 79, 2011. Available at SSRN: http://ssrn.com/abstract=1741623

Contact Information

Shay Lavie (Contact Author)
Tel Aviv University, Faculty of Law ( email )
Minkoff Building, #428
Tel Aviv, 69978
Israel
972-3-6409146 (Phone)
HOME PAGE: http://www.law.tau.ac.il/Eng/?CategoryID=242&ArticleID=548
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