Class action lawsuits let individuals join together to fight back against harm caused by corporations. Discover how class action lawsuits may pertain to you.
Every day, deceptive business practices and outright negligence Define: Negligence The failure to exercise the level of care that someone of reasonable prudence would have exercised given the same circumstances. on the part of corporations and other institutions cause physical and financial harm to individuals. Class action lawsuits give consumers the ability to fight back. Learn more about class action lawsuits through the answers to these common questions.
What Is a Class Action Lawsuit?
A class action is a lawsuit that’s filed by one or more individuals who represent a larger group of people. This group typically consists of consumers who’ve experienced similar injuries or financial harm caused by the actions of a company or other entity.
Class action lawsuits may be related to issues such as:
- Defective products
- Consumer fraud, scams and rip-offs
- Corporate misconduct
- False labeling
- Environmental hazards
- Wage and overtime violations
- Misleading advertising
A class action lawsuit may also be referred to as a class suit or a representative action.
What Are the Benefits of a Class Action Lawsuit?
A class action eliminates the need for multiple lawsuits, resolving the collective claims through a single legal proceeding. These suits often occur when damages are minor, rendering individual lawsuits impractical or financially ineffective.
How Can I Join a Class Action Lawsuit?
Class action lawsuits typically don’t require any action to join. If you’re eligible to receive compensation from a class action ruling, you may receive an informational notice that includes instructions for claiming funds. If class members can’t easily be identified, notices may be posted in newspapers, industry magazines or on relevant websites.
Opt-In Class Actions
Opt-in class actions are the exception. These lawsuits typically involve workplace violations, such as unpaid overtime, wage inaccuracies or employment discrimination, and class members must elect to opt in. Potential class members may receive information detailing the lawsuit and how to participate.
What’s the Cost of Joining a Class Action Lawsuit?
There is no cost to be a class member in a class action lawsuit. Because lawyers typically get paid only if they win the class action suit, their earnings may be a percentage of the settlement money or paid as a separate fee.
What Happens in a Class Action Lawsuit?
Class action lawsuits happen in several essential steps:
The attorney for the plaintiff evaluates the viability of a potential class action lawsuit by looking at the following factors:
- How many people may have been affected
- Whether a lawsuit was already filed against the entity
- The statute of limitations
- Previous rulings on similar cases
- Whether individual lawsuits are preferable to a class action
- Bankruptcy filings by the potential defendant
If the case is deemed viable, the attorney files a complaint, which defines the facts, outlines damages being sought and describes the class, which includes the individuals covered under the suit.
For the case to go forward, the presiding judge determines if the lawsuit should receive class action status.
Once the case has been certified as a class action, attorneys gather proof of the allegations. This may involve requesting documents from the defendant or interviewing individuals with knowledge of the circumstances surrounding the class action.
Class actions ultimately resolve through either a settlement or a court ruling. If the parties settle, the presiding judge must approve the settlement terms. If the parties opt for a trial, a jury is selected to find in favor of either the class or the defendant.
Notification and Disbursement
Upon resolution of the lawsuit, notices are issued to members of the class, providing information about the outcome as well as instructions to claim settlement funds, if applicable. Funds are then distributed to the class members.
How Long Do Class Action Suits Take?
Because all class action suits are different, their timelines vary. Rulings can take as few as several months or may take years. The timeline can be extended if court rulings are appealed.
Companies who choose to settle sometimes do so quickly, especially in clear-cut cases of injuries caused by product defects or when embarrassing or damaging allegations surround the case.
How Are Funds Disbursed?
If the jury rules in favor of the plaintiffs or if the defendant settles, compensation may be disbursed in one of two ways.
- By dividing the settlement funds equally among class members
- Through a formula that’s applied to all class members to determine the amount owed to each person
Regardless of how the amount is determined, class members must claim settlement funds to receive reparation.
What Is a Cy Pres Award?
A Cy Pres Award is a charitable gift funded by compensation from a class action lawsuit. This typically happens in one of two scenarios. It may occur when money remains in the settlement fund after the appropriate distributions have been made. Other times this happens if the overall settlement amount is not large enough to justify allocation to class members, which often occurs when the purpose of the class action suit is to require the defendant to cease illegal practices.
Class members can suggest any recipient for the charitable gift, but the judge ultimately decides. The recipient must promote the interests asserted in the related case.
What Is a Class Action Waiver, and Can It Prevent Me from Joining a Class Action Suit?
A class action waiver is a provision that corporations insert into contracts, often in the fine print, to restrict customers or employees from filing a class action suit. Although they’re not uncommon, these waivers may be deemed unenforceable or invalid by a court, and a class action filing may proceed.
If the waiver is deemed valid by the court, a person may still be legally entitled to file an individual lawsuit against the defendant.
How Do Mass Torts Differ from Class Actions?
Although mass torts are similar to class actions in that they involve large groups standing against a defendant, there are significant differences. Whereas a class action may result in a single settlement meant to be distributed among class members, a mass tort is individualized, providing compensation that’s commensurate with the damages suffered by each individual.
Mass torts are often used when the damages or injuries caused are severe and may result in a sizeable settlement.
List of Current Open Class Action Lawsuits
Online resources, such as ClassAction.org, are available to help consumers search for active class action lawsuits, mass torts and open investigations. Lists are updated regularly, so it’s advisable to check back often.