What is a Class Action Lawsuit and How Do They Work ?

 

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The term “class action suit” is thrown around a lot. Maybe you’ve heard it in a late night TV advertisement, or you might have received a class action lawsuit notice in the mail. While many people have heard the phrase, fewer understand the precise meaning or nature of these cases.

Whether you’re looking to take part in a class action, or you’re still wondering what a class action suit actually is — it’s important that you have the right information. This article covers class action, how they work, and the purposes they serve. This includes instances when a class action is appropriate, such as a bad drug lawsuit, and when to file. Read on to learn the answers to these questions and more.

 

 

The Basics of Class Action Lawsuits

So what is a class action lawsuit? Let’s look at the class action definition:

A class action is a procedural device that permits one or more plaintiffs to file and prosecute a lawsuit on behalf of a larger group, or “class.”

 

In class action, a number of people bring similar claims against a defendant.

The plaintiff is made up of a group of people who are represented by a single member of the group. He or she serves as the class representative.

While the representative is the only person named in the case, any decision made applies to all other participating plaintiffs. For example, when a group of lenders allegedly lost car owners’ titles, one man served as the named plaintiff to represent the hundreds of automobile owners who were affected.

 

 

How Do Class Action Lawsuits Work?

Class actions leverage collective power to represent people who have been affected by the same harmful or unlawful actions by a single person or organization. This helps to build a stronger case, and it lets courts manage lawsuits that would otherwise have too many individual plaintiffs. They are common in cases involving defective products, predatory or unsafe business practices, and employment-related claims.

 

 

Important Class Action Lawsuit Definitions

These are some common phrases you might here in regards to a class action:

 

Lead Plaintiff

Sometimes termed “named plaintiff,” this person files the claim and serves as a representative on the lawsuit for all other affected class members.

 

Class Member

The class is the group of individuals who have been affected by the defendant’s actions. Each participating individual in the case is a class member. While the class members are not named in the lawsuit, any decision made about the lead plaintiff’s case applies to each class member.

 

Defendant

In class action cases, the defendant is the individual or group who allegedly committed an unlawful or harmful act against the plaintiff class.

 

 

Steps in a Class Action Lawsuit

The steps of a class action include:

 

Filing the claim

Class action lawsuit cases begin once a lead plaintiff files a claim against the defendant. The plaintiff’s claim is made on behalf of all class members. This claim is almost always made with assistance from a prosecution lawyer. During this step, the plaintiff and his attorney often seek additional class members to help join and strengthen the case.

 

Class certification

For the lawsuit to proceed, the plaintiff’s claim must be certified by the courts. Certification requirements differ state to state, but generally they must meet the standards outlined below in the “Requirements for Class Action Lawsuit” section. The defendant has the right to object to the motion for class action certification.

 

Discovery

The discovery procedure is the pre-trial phase of the lawsuit in which both parties (the plaintiff and the defendant) and their representative attorneys gather information to strengthen their case.

 

Resolution of claims / trial

Once the plaintiff has gathered evidence and submitted the claim, a resolution is made. The two parties’ attorneys can decide on a settlement out of court. If a settlement is not reached, it is likely that the case will go to trial.

 

Notification of class members

After a resolution has been made, participating class members receive a notification of the resolution. In these cases, participating members earn percentages of the total compensation. These case results illustrate potential class action lawsuit rebates.

 

 

Requirements for Class Action Lawsuit

Class actions must meet a baseline of requirements before certification. Class actions are governed by the Federal Rules of Civil Procedure Rule 23. Knowing how to file a class action means understanding these case requirements.

 

Number of individual plaintiffs

Class action lawsuits are used when it would be impractical to handle each plaintiff’s claims in individual cases. Local courts determine how many individual cases justify a class action lawsuit.

 

Common questions of law or fact

Each individual plaintiff’s case must be based on the same wrongdoing or harmful action allegedly made by the defendant.

 

Plaintiff and class representative consistency

The claim made by the case’s class representative must be consistent with the claims made by the other class members.

 

Fair and adequate protection

The lead plaintiff (the class representative) must provide sufficient, principled protection for all class members. This means he or she has adequate representation by attorney and serves each class members’ best interests.

Class action lawsuit requirements can differ state to state, but most follow guidelines set by the Federal Rules of Civil Procedure (FRCP).  A comprehensive explanation of these requirements is covered by the Federal Rules of Civil Procedure Rule 23. An attorney can help you better understand these preconditions.

 

 

How Long Does a Class Action Lawsuit Take?

The time it takes for a class action case to reach settlement is dependent on a variety of factors. Some cases have been resolved in just a few months, while others have lasted nearly two decades. Generally, most class action lawsuits are settled within two to three years. Cases where a ruling is appealed often take longer.

 

 

How Much Do Lead Plaintiffs Get in Class Action Lawsuits?

Payouts in class action lawsuits vary on a case-by-case basis. The lead plaintiff, also known as the class representative, usually receives a larger percentage of the case settlement than the other class members. This is because he or she typically puts more time and effort into the case.

The court decides how much the lead plaintiff receives based on the individual’s involvement in the case, the overall settlement awarded to the entire class, and the injuries or damages the plaintiffs suffered.

Note that these steps and requirements differ for claims made against government agencies.

 

 

Pros and Cons of Class Action Lawsuits

Understanding the class action lawsuit meaning might give you a general idea of the power of these cases. While class action cases can be an effective tool for a group of plaintiffs, they’re not always the best legal option. Let’s take a look at some of the positives and negatives of class action lawsuits.

 

Advantages

Advantages of class action lawsuits include:

Increased negotiating power

Class action lawsuits give plaintiffs more leverage in negotiations than if they tried to file a claim individually. For example, 400 people affected by a company’s actions will make a greater case than one person fighting alone. Class action cases often motivate the defendant(s) to settle to avoid needing to make individual payouts.

 

Lower litigation costs

Class action cases let the class members split litigation costs and attorney fees. This can also help them receive better restitution.

 

Judicial efficiency

Class action lets courts handle multiple people’s claims under a single representative suit. This increases judicial efficiency by reducing the number of cases in court.

 

Drawbacks

Disadvantages of class action lawsuits include:

 

Longer settlement time

Class action lawsuits are complex. They involve multiple plaintiffs and are frequently appealed. Because of this, they often take a long time to reach settlement. The statute of limitations can also differ for class action claims.

 

Less control for class members

Class action gives multiple plaintiffs the power to act as a group, but each class member also gives up some power and autonomy. The class representative and his or her lawyer are in charge of representing the whole. This also makes it difficult to address individual needs, such as when compensation is needed in a personal injury lawsuit to address medical expenses.

 

Lost ability to make a private claim

Once an individual joins a class action suit, he or she cedes power to make an individual claim. This is a major blow if the suit is not successful.

 

 

Tips Regarding Class Action Lawsuits

Class action lawsuits are an effective tool for multiple plaintiffs taking on an unlawful individual or organization. These suits leverage collective power to help individuals make a greater case. Unfortunately, they can also be hard to navigate.

A poorly planned case can end up hurting class members while taking away their right to sue independently. While class action lawsuits might seem complex, having the right information and representation will increase your chances for success. It is advised that you seek guidance from an experienced injury lawyer before joining or filing a class action suit. Read on to learn more about how to effectively join and start a class action case.

 

 

How to Get a Class Action Settlement or Rebate

Many people don’t even know they are eligible for class action lawsuit rebates and settlements. Class action cases are common with defective products and false advertising claims. Knowing where to find open settlements and how to join a class action lawsuit requires a bit of research. The linked website contains lists of class action lawsuits that are pending and cases that are open to claims.

To find open claims, visit the Consumer Class Action Database and click on the “Open to Claims” button. Open class action suits are all listed with the claim deadlines in underlined, large text. Click on the claim’s deadline, and then you will be on the page with claim forms to input your information to receive your payment for the suit. If you have any questions about claiming the settlement or rebate, a lawyer can help you better understand the process.

 

 

How to Start a Class Action Lawsuit

If you were harmed by the actions of an individual or group and those actions affected other people in the same way, you could be eligible to start a class action suit. Before you begin, be sure that you have read the previous information and understand the criteria for a class action. This includes being able to answer, “what is a class action suit?” and that you meet the case requirements.

Once you have established that you have a proposed class action case, contact an attorney experienced in class actions. Be sure to (I think we have a ‘how to prepare for trial’ or something similar we can link) and, if possible, bring contact information of other affected individuals. Your lawyer will evaluate the situation to help you determine if there is potential for a successful case. This includes reviewing standards for class certification, contacting potential class members, and preparing documents for the discovery phase. If your attorney believes a class action suit can be filed, he or she will draft a complaint in court.

 

 

Summary
What is a Class Action Lawsuit and How Do They Work ?
Article Name
What is a Class Action Lawsuit and How Do They Work ?
Description
What is a Class Action Lawsuit? How Do I File a Class Action Lawsuit? Learn how to join a class action & how class actions work in this guide.
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TorHoerman Law
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+ - References

Action, Consumer. Consumer Action - Class Action Database, www.consumer-action.org/lawsuits.

Bonner, Marianne. “What Is a Class Action Lawsuit?” The Balance Small Business, www.thebalancesmb.com/what-is-a-class-action-lawsuit-3623787.

Komando, Kim. “Getting Money You're Owed from Class-Action Lawsuits Has Never Been Easier.” USA Today, Gannett Satellite Information Network, 9 Sept. 2019, www.usatoday.com/story/tech/columnist/2019/09/05/class-action-settlements-find-out-if-you-are-owed-money/2209550001/.

“Rule 23 - Class Actions.” 2020 Federal Rules of Civil Procedure, 29 Nov. 2019, www.federalrulesofcivilprocedure.org/frcp/title-iv-parties/rule-23-class-actions/.

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