Download this Paper Open PDF in Browser

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

38 Pages Posted: 17 Jan 2011 Last revised: 22 Jun 2011

Shay Lavie

Tel Aviv University - Buchmann Faculty of Law

Date Written: December 1, 2010

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.

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

JEL Classification: K40, K41

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: https://ssrn.com/abstract=1741623

Shay Lavie (Contact Author)

Tel Aviv University - Buchmann Faculty of Law ( email )

Ramat Aviv
Tel Aviv 69978, IL
Israel
972-3-6409146 (Phone)

HOME PAGE: http://www.law.tau.ac.il/Eng/?CategoryID=242&ArticleID=548

Paper statistics

Downloads
212
Rank
120,593
Abstract Views
3,032