What Is the Difference Between a Lawsuit and a Class Action Lawsuit?

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When someone has reason to bring a claim to court over some kind of injury, they have a choice to make in terms of what kind of lawsuit to pursue: an individual lawsuit or a class action lawsuit. Each option has its advantages and disadvantages, and these will depend greatly on the specific circumstances involved.

Knowing the difference between a lawsuit and a class action lawsuit is the first step to determining which option is better for a particular set of circumstances.

What is a lawsuit?

Essentially, when a person files an individual lawsuit, it is a single plaintiff or a very small group filing a claim against a defendant or defendants. The defendant then has to respond to the plaintiff’s complaint which is a formal legal document laying out the facts and reasons for filing the lawsuit in the first place. A defendant may choose to attempt to reach a settlement with the plaintiff, rather than allowing the litigation to proceed to trial.

A settlement is a voluntary agreement between the plaintiff and defendants, approved by a judge, to bring an end to litigation without determining liability, usually for a monetary award. Settlements can also include terms such as requiring policy changes in the future.

If a lawsuit proceeds to trial, it then falls to the court to reach a judgment in favor of the plaintiff or defendant and award damages accordingly.

What is a class action lawsuit?

A class action lawsuit is litigation that brings together a large number of people, called the class, who have suffered similar injuries or financial losses caused by the same entity. This means all of these similar cases can be filed as one class action, which can give the lawsuit more weight to it than if each individual class member filed.

These lawsuits are often filed against major companies that have allegedly wronged a slew of people in a similar fashion. Class action litigation is often filed over defective products, deceptive practices, neglectful care, labor laws and other kinds of issues that may have similarly affected many consumers or employees in the same way.

How many people are in a class action?

While there is no specific required number of class members to constitute a class action, judges do not generally certify a class unless there are at least a few dozen class members involved. Technically, the legal requirement for the number of class members is that they be “so numerous that the joinder of all members is impracticable.”

What is the financial risk of a class action?

Often, a class action lawsuit may be a much more financially feasible method of pursuing litigation for smaller individual compensation amounts.

A person who has suffered a relatively small injury may not find it worthwhile to hire a lawyer and pursue litigation over that injury themselves. However, if a hundred people — or a thousand people — all suffered similar small injuries caused by the same party, all these people may together form a class and file a lawsuit together.

Plus, defendants risk losing a significant amount of money if a class action goes to trial. Because of this risk, many defendants choose to reach a settlement with class members rather than continue the litigation.

However, individual class members do not have the same kind of decision-making power in their class action litigation that plaintiffs have over their individual lawsuits. Class members have little or no control over hiring attorneys, choosing to settle and other major decisions.

It is typical that class action attorneys agree to take on class action cases on a contingent fee basis, meaning the lawyer agrees to a fixed percentage of whatever award is agreed upon. If the lawsuit is lost, however, the lawyer agrees to take no compensation.

One significant difference between a lawsuit and a class action lawsuit is that any award or settlement money from an individual award will only be given to one or a few plaintiffs, which generally means there is a higher individual payout associated with individual litigation.

In a class action lawsuit, an award will be split among all members of the class, which can number in the hundreds or even thousands. And while individuals who file lawsuits later than others may not receive as much compensation, all class members will receive compensation at the same time in proportion to their damages.

However, there is less risk associated with participating in a class action lawsuit compared with filing an individual lawsuit.

Class members involved in a class action lawsuit that is lost do not lose money and typically don’t have to pay attorney’s fees. The only potential loss is that, by agreeing to join a class action, class members are then unable to file individual litigation over the same issue and so cannot pursue their own lawsuit after a class action fails.

Class action litigation can require little on the part of individual class members. Indeed, it is up to the lead plaintiffs, the defendant and the court to identify class members and make “reasonable effort” to contact them and notify them that they are being included in a class action lawsuit. Class members often don’t even have to opt in; they are automatically included if it is determined that they are eligible, though they can choose to opt out if they wish.

It is important for potential claimants to consider the difference between a lawsuit and a class action lawsuit and determine which one will be best for a particular set of circumstances. Regardless, filing or joining litigation can be a daunting prospect, so Top Class Actions can connect people with an experienced attorney. Consumers may find discussing the issue with an experienced attorney can help them decide which is the best option available for them.