Singapore Law - In the aftermath of OBike, do we need class action lawsuits?

August 5, 2018

 

In Singapore, we don't have class action lawsuits, unlike in the US, where lawyers can gather together and put together an action for a "class" of persons. So, unlike in Singapore where each OBike customer has to sue OBike for their deposit, a lawyer could file a suit on behalf of a "class", that is, all customers who are owed their deposits. The lawyers would then have to disburse the award among the class.

 

I used to think that class action suits were basically "private regulation", that the US was so scared of regulation and regulatory bodies that they didn't trust regulators to actually regulate, and so put regulation in the hands of the private sector. After all, class actions basically punish a company for not complying with basic standards of safety, or unethical behaviour, or something similar, and we had the overbearing government in Singapore to sort out all these bad actors if they were any reasonable size at all.

 

In Singapore, you wouldn't have a class action lawsuit against a bank, say, for misrepresenting fees or overcharging over a class. You'd have people complaining to MAS and MAS stepping in to regulate. Same for the telcos, IMDA is way more heavy handed than any US regulator would dare to be.

 

How then did we end up in this OBike situation, where the company was unregulated, $10M of people's money was essentially stolen, and nobody can be bothered to sue to get the money back because who wants to go through all of that for $50? And the government just sits on their hands and does nothing? CASE is toothless as we know, LTA is just "deeply disappointed", MAS doesn't care because it's a deposit, it's not a bank account... and OBike goes bankrupt and gets off scot free.

 

This is insane. Why are we placing so much faith in overreaching government agencies if they can't even punish bad actors? Class actions have their own problems but if that's what it takes, then we need some protection. Make some more work for the lawyers, at least they have some incentive to control these guys.

 

 

Addendum: The difference between what we have (representative actions) and the US style class actions is that in a representative action, all the members of the class need to be identified and allow a representative to represent them.

 

So, in the OBike example, you would have to gather every single individual affected (numbering in the thousands I presume) and have them all sign something to say that they were ok with Tan Ah Beng representing all of them.This is different from the US style, where you can sue for unknown class of persons, as long as they can be ascertained.

 

As an example, in Singapore, we would have to get however many people that made deposits (I assume at least 20,000, since OBike had at least $10m) and get all of them to agree to allow 10 persons to represent all of them. This is not feasible. If you didn't manage to get all 20,000, and say you only managed to get 1000 customers, then your max claim would be $50 x 1000, and the remaining 19,000 customers would be out of luck and have to start their own case.

 

However, in the US, a lawyer and 10 OBike customers could get together and start a case on behalf of ALL 20,000 persons for the entire $10M, even without their permission. After the case is won (hopefully), the damages would need to be disbursed to the class. This is why you have things like the Amazon settlement in the US, where you see ads like "If you've bought a book from Amazon between 2000-2002 you are entitled to $X".

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