1997 1030 - GOV (Senate) - Class Action Lawsuits: Examining Victim Compensation and Attorneys' Fees, Charles Grassley (R-IA)

  • 1997 1030 - GOV (Senate) - Class Action Lawsuits: Examining Victim Compensation and Attorneys' Fees, Charles Grassley (R-IA)  ---  [BonkNote]
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    • Senate - Committee On The Judiciary - Subcommittee On Administrative Oversight And The Courts
  • (p59) - Brian Wolfman, attorney, Public Citizen
    • John Hancock Mutual Life Insurance Company
      • This is a case brought on behalf of hundreds of thousands of current and former policy holders who were subject to false or deceptive sales practices by John Hancock.
      • The settlement, which was presented to the district court for its approval just last week, creates an elaborate claims payment system to provide individualized relief to any Hancock policyowner who can show that he or she was subjected to improper sales practices by Hancock.
        • The claims system is weighted in a claimant's favor, and some claimants should automatically receive not only whatever compensation is owing to them, but also a small bonus.
        • The settlement also provides modest general relief in the form of discounts on John Hancock insurance and in vestment products to class members who choose to forego the claims payment system.
      • On behalf of former Senator Howard Metzenbaum, who is a Hancock policyholder and member of the class, we objected to this settlement on two grounds.
        • First, we thought that the notice to class members was impenetrable in a number of key respects, which would make it much less likely that deserving claimants would, in fact, pursue their claims for redress. Fortunately, the settling parties agreed to amend the notice to clarify and strengthen it to ensure that claimants were fully advised of their rights.
        • Second, and more problematic, the settlement called for an award of $39 million in attorneys' fees.
      • We opposed that aspect of the settlement, but for reasons that go to the heart of this Committee's inquiry.