What is a Class Action Lawsuit?
When a group of people suffers common injuries from the conduct of an individual or entity, known as the defendant, they may file a class action lawsuit. This civil suit has at least one individual acting as a representative of the class action group.
Issues that lead to a class action can vary. However, all members of the group have common experiences related to the issues in the dispute. Bringing this type of legal action means everyone in the class action group attests to being affected by the individual or entity.
Often, class actions are the only way a person can pursue their legal claim at a lower cost. If the individual representative, or lead plaintiff, wins the suit, each member of the class receives an award. The amounts may or may not be equally distributed.
Additionally, class-action lawsuits can be brought before a state or federal court.
Categories of Class-Action Lawsuits
There are a number of issues and cases that can be brought as a class action case. Often, litigation begins as one of these categories:
- Consumer – business entities are held accountable for engaging in illegal or fraudulent and systematic business practices where the consumer is harmed or scammed.
- Employment – typically when an employer discriminates against employees. Other issues include hour and wage, immigrant worker or on-the-job injuries from safety violations.
- Personal injury or product liability – brought when a large number of individuals are physically harmed by a defective product. Pharmaceutical fraud, nursing home negligence, sexual abuse and human rights violations are examples.
- Securities – plaintiff investors who fell victim to a defendant’s improper conduct such as fraud or whistleblower litigation.
Reasons Why People May File Class Actions
Just as there are many examples of class action cases, there are varied reasons why plaintiffs may choose legal proceedings to resolve their issue.
Most people may choose not to pursue legal action against a large corporation on their own. They might believe that their injuries are relatively minor, which could lead to a small payout. Even when this is the case, the collective loss of all could prove to be very large.
With one lawsuit for all plaintiffs, a class action makes sure that injured individuals receive compensation. Typically, these types of cases are filed for a variety of reasons such as:
- Breach of contract
- Defective medication or product
- False advertising
In some cases, class actions represent the only way to prosecute businesses or an individual and require them to compensate individuals for the harm caused by their behavior. A class action may also help to deter businesses or an individual from future wrongdoing.
Furthermore, class actions help to gain more traction while also limiting litigation costs incurred by individuals. People who may not be able to afford a personal injury attorney can still receive competent representation.
Grouping people with similar issues and experiences prevents the need to repeat elements of a trial such as witness testimony and exhibits.
Step-by-Step Process of Filing a Class Action Lawsuit
People in a class action suit are usually bound by the decision of a court even when they do not directly participate in litigation. The following steps describe how the legal proceedings to prosecute wrongdoing can protect each class members’ rights to fair compensation.
Determine the Validity of Filing a Class Action
The first step is determining whether a class action claim can be filed. This begins once a person contacts a law firm about a potential case. The attorney evaluates the facts to ensure a class action can be filed. A primary concern is avoiding a frivolous lawsuit that will be dismissed by the court.
File the Class Action Complaint
The attorney will draft a complaint after determining how many people were injured in a similar manner. This complaint, or legal document, is filed in court and will describe the facts of the class action case and the amount of damages sought.
Additionally, the complaint describes the class of individuals potentially covered by the suit. The class members might be either state-wide or nationwide.
Receive Class Certification
Filling a legal claim does not guarantee that the case will become an official class action. The judge that presides over the case must certify that the suit can proceed with class-action status.
Begin Discovery Phase
After certification, the case moves into the investigatory phase where attorneys may request documents from the business or individual being sued. Documents obtained during discovery may be used to prove the allegations in the complaint.
During this step in the process, personal injury attorneys may also conduct depositions. This gives them a chance to speak to individuals with knowledge of circumstances and events related to the subject of the class action.
Obtain a Resolution
Oftentimes, class actions settle before the trial begins. When this happens, the defendant may set up a fund to pay the class members. The judge presiding over the proceedings will review the settlement and decide whether it is fair and adequate for the class members.
An order from the judge approving the settlement must occur before the case is finalized.
Without a settlement, the class action lawsuit is moved to a jury trial. During these proceedings, the individual who initiated the case may need to testify. Other witnesses may be called for their testimony regarding the facts that determined the basis of the class-action case.
A settlement may occur during the trial. If not, the jury will be tasked with finding in favor of either class members or the defendant.
Notification Sent to Class Members
Win or lose, class members will be notified when their class action lawsuit is resolved. The attorneys that have been working on the case may issue the notice. Class members are informed about the judgment or settlement and given a chance to opt-out of the case.
Included in the notice is a description of the underlying facts that the class-action case alleged. The groups of people who may have a right to claim a portion of the settlement are listed. In some cases, this notice is sent twice: after certification by the judge and after the resolution of the case.
How Many People Can Join a Class-Action Lawsuit?
Class-action litigation does not need an official number of people to join. A wide range of class action sizes is likely depending on the facts.
One case may have two dozen and another may have hundreds of class members. However, a judge may not certify a class unless there are enough people to consolidate individual cases.
While legally speaking there is no set number, a large group of people gives validity to the merits of the case.
In general, an individual should not worry about having enough people for the class action. After reviewing the potential for a case, a personal injury attorney will dig deep into the facts. They will collect evidence to support injuries and financial damages sustained by members of the class.
Individual Rights in Class-Action Cases
Class actions can give individuals legal power that they would not garner on their own. Still, these types of cases can also require some sacrifice from plaintiffs. Giving up the right to pursue legal action means living with the verdict.
Since a person’s individual situation may not be satisfactorily addressed, they should weigh the pros and cons before signing onto the class action. An experienced class action attorney will discuss their options during a free consultation.
When are Settlement Payments Received?
Assuming no one files an appeal after a judgment is reached, class members receive settlement payments approximately nine months after the settlement agreement is submitted. Generally, the facts of each suit determine what happens after preliminary approval.
While settlement payments can take nine months or even a year, most payments can also take longer to reach class members. This process allows efficient workings of the court system. However, it does not necessarily translate to faster payments getting to plaintiffs.
Settlement versus Going to Trial
A settlement is usually quicker for some legal proceedings unless negotiations stretch over a number of months. Even once an agreement is reached, the court must approve the settlement. This process could take just as long as it takes to have a trial.
The class representative directly participates in settlement negotiations on behalf of all class members. Any input from class members comes during public hearings before the official approval.
The judge presiding over the case can order modifications based on the input received from class members or other factors. A plan to pay out damages is put in place once the settlement offer is approved.
Consult a Dedicated Team of Personal Injury Attorneys
The goal of class-action proceedings is to efficiently consolidate similar legal claims against an individual or business. A dedicated team of personal injury attorneys is committed to helping individuals whose cases may be eligible for class-action status.
If you believe that other people have suffered damages similar to your own, discuss your situation with someone knowledgeable of how these cases work. Seek legal advice based on the facts in your case and others during a free consultation.