Saturday, August 4, 2007

The Law Is An Ass-2

"Recently, though, some class-action experts have been asking: Are payments to clients really so bad"?, WSJ, 4 August.

Milberg, Weiss, the US's largest class-action law firm was indicted in 2006 for making "kickbacks" to clients. I saw the case as economic nonsense. Milberg's real "crime" was suing "friends" of the Bush Administration. Professors Bruce Kobayashi and Larry Ribstein (K&R) believe "the sort of fee-sharing alleged in the Milberg case could, if legalized, actually increase the payoff to all class members". It's an empirical matter, but I suspect K&R are right. Another law professor Richard Nagareda, also suspects that the "kickbacks" do not harm the class members.

I note, the Department of Justice did not bring charges against Mayer, Brown, Rowe & Maw (MBR&M), a large law firm which is suspected of having committed fraud in connection with the sale of Refco, WSJ, 27 July. In my judgment, there is real evidence that MBR&M participated in a fraud. So? Attention Alberto Gonzalez. Or is the Gonzalez Justice Department too busy worrying about "criminals" like: Conrad Black, Martha Stewart and the Border Patrol Two?

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