Class Action Lawsuits: A Simple Guide

What is a “Class Action” and Should I Join One?

For certain “minor” harms suffered, there is a mechanism which enables many people to combine similar claims, making it more feasible to get a remedy. This is called a class action lawsuit or simply class action. It is often used for consumer or employer issues.

You have almost certainly been part of a class action at some point, whether you realize it or not. You know all those data breaches in which a company gets hacked and your personal information is stolen? You’re probably not going to sue over that on your own. But when a few of the affected people get together and sue in a class action, they can get compensation for all of the (potentially millions) of affected people.

How do class actions work?

The process of a class action lawsuit involves several key steps:

  1. Identifying a Representative Plaintiff: A plaintiff, or a small group of plaintiffs, who have been harmed by the defendant’s actions, are identified to represent the entire class (which could be thousands or even millions of people).
  2. Certification of the Class: The court must certify the class, determining whether the case meets specific criteria outlined in the relevant jurisdiction’s laws. These criteria typically include commonality of claims, numerosity (a sufficiently large group of affected individuals), adequacy of representation, and typicality of claims.
  3. Notice to Class Members: Once certified, class members are notified of the lawsuit and given an opportunity to opt-out if they wish to pursue individual claims separately.
  4. Discovery and Litigation: The litigation proceeds similarly to individual lawsuits, with both parties engaging in the discovery process to gather evidence. The class representatives and their attorneys act on behalf of the entire class.
  5. Settlement or Trial: The case may be resolved through settlement negotiations or proceed to trial if a settlement cannot be reached. If successful, damages or remedies awarded are distributed among class members according to a court-approved plan.

How much money can I get from a class action?

If a class action lawsuit is successful, the representative plaintiffs usually get much more money than the rest of the class. As a standard member of the class, you may not get much – maybe $10, maybe $100 – but the process of claiming your piece of the compensation is generally as simple as filling out a short form.

What is a class action settlement?

The vast majority of class action lawsuits are settled before they get to a final judgment. Most often you hear about class action legal settlements, where the company being sued agrees to pay out a large sum of money, and may or may not concede that they actually did anything wrong.

What are the advantages of class actions?

Class action lawsuits offer several advantages over individual lawsuits:

  • Strength in Numbers: By consolidating claims, class actions amplify the voices of individual plaintiffs, making it economically feasible to pursue legal action against well-funded defendants.
  • Efficiency and Judicial Economy: Class actions streamline the legal process by resolving multiple claims in a single proceeding, reducing court congestion and saving time and resources.
  • Access to Justice: Class actions provide a mechanism for individuals with limited resources to seek redress for their grievances, leveling the playing field between consumers and powerful corporations or institutions.
  • Deterrence: The threat of facing a class action lawsuit incentivizes defendants to adhere to legal standards and conduct business ethically, reducing the likelihood of future wrongdoing.

Further Resources

See more Legal Basics.

See also 7 Easy and Legitimate Ways to Make or Save Lots of Money by Exercising Your Legal Rights

Find class actions to join at Consumer-Action.org

Find a lawyer to take on your class action. Generally you will not need to pay anything upfront – only if you win.

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