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Class Action Lawsuit Overview
When a small number of plaintiffs represents a much larger number of people in a lawsuit, the legal action is called a “class action lawsuit.” The number of people who can be included in a class action lawsuit can number anywhere from several dozen to several million. These people who are represented in a class action lawsuit are called “Class Members.”
Class action lawsuits are appropriate when an entity has caused a similar kind of harm to a large number of people. This type of lawsuit is particularly useful for holding companies accountable in cases where the harm caused to each individual is very small, so small that it may not be worthwhile for any one person to sue over.
For example, if a company misleadingly markets an inexpensive product, a single purchaser may only suffer a small amount of financial damage or may not even realize they have been harmed. Most consumers would not file a lawsuit over a small amount of damage, and the company would reap the rewards of its unethical or illegal behavior.
However, if one or a few purchasers can bring a class action lawsuit against the company, they can hold the company responsible for all of the damages they have caused to all Class Members, creating a much greater deterrent against the damaging behavior.
Another important aspect of a class action lawsuit is the binding effect it has on the rights of Class Members. Those who do not take action to remove themselves from the litigation or object to any settlement that results may find that they are unable to sue later on.
How Do Class Action Lawsuits Work?
Class action lawsuits can be filed in state or federal courts. These courts will use slightly different criteria to determine whether a class action lawsuit is appropriate for the case.
Generally, class action lawsuits are initiated by “lead plaintiffs” who represent other individuals who have allegedly been harmed. It is important to consider an experienced class action lawsuit attorney to help put together this kind of legal action, because a lawsuit must meet certain requirements to be a class action. This process is called “certification.”
In order to certify the class action lawsuit, the lead plaintiff or plaintiffs must appropriately represent the Class Members. The lead plaintiffs will have to demonstrate that their interests in the litigation line up with that of a typical Class Member.
The court will look to see that the lead plaintiffs’ experiences present the same “questions of law or fact” as those affecting class members. Basically, the plaintiffs need to have experienced the same or similar harm or damages as the Class Members.
If the court determines that a class action lawsuit meets these requirements and can be certified, Class Members will be notified. The requirements for notification vary between courts, but most individuals have received postcards, letters or other communications notifying them that they are a Class Member in a pending class action lawsuit. Notice is also often published in magazines or newspapers, or online.
Class Members must be provided understandable information about the class action lawsuit, including their right to exclude themselves or opt out of the litigation. Additionally, Class Members must be told that they will be bound by the outcome of the class action lawsuit if they do not take action to opt out.
Class action lawsuits also must go through all of the other steps of litigation that apply to other types of lawsuits, including investigation, pleadings, discovery, pretrial motions, and trial, as well as negotiations for settlement.
Outcomes of Class Action Lawsuits
Class action lawsuits can go to trial or can be settled by the parties. They may also be dismissed by the court if the court finds that the allegations are not sufficient, or the court may end the lawsuit with a final decision in the defendant’s favor.
If a class action lawsuit goes to trial and a verdict is found in favor of the plaintiffs, or the parties decide to settle the allegations, Class Members will be notified.
Verdicts and settlements can have many different results. Defendants often must pay a certain amount into a fund to be distributed among Class Members. Sometimes, defendants are required to make changes in their policies or practices to make sure similar harm does not happen again in the future.
If Class Members are easily identified and each claim can be reasonably be determined, they may automatically receive a payment. But in most cases, Class Members need to proactively make a claim with the settlement administrator.
Sometimes Class Members will need to provide evidence to back up their claim, such as proof that they purchased the product at issue. It is important to keep tabs on class action lawsuits in which you may be a Class Member to ensure you make claims to receive awards to which you are entitled. Top Class Actions keeps readers informed about open class action settlements, giving readers a chance to make a claim and get the benefits they’re entitled to.
