What is a Class Action Lawsuit?

Most people have come across the term “class action” at some point, perhaps in a letter or TV commercial prompting them to join a class action lawsuit. Oftentimes, people dismiss these notices because they aren’t familiar with class actions and don’t understand the possible benefits. However, getting involved in a class action can help you receive compensation for your injuries and spread the word about potentially harmful products or unfair business practices.

Creating a Class Action

A class action is a type of lawsuit involving a large number of individuals who share similar injuries and legal claims. These individuals come together to sue a common defendant. Class actions are commonly used in cases where a number of individuals were injured by the same defective product.

Before a class action can proceed, however, the court requires that the individuals participating in the lawsuit be certified as a class. This means that before they can have their day in court, the individuals must meet several conditions. Certification standards may vary from state to state, but most courts follow the requirements used by the federal courts:

  • There are a large number of individuals – known as class members – who share similar injuries and legal claims.
  • The number of class members is large enough that it would be inefficient and impractical for the court to hear the cases separately.
  • There’s at least one class member who can adequately represent and protect the interest of the entire class. This member will serve as a class representative.

Class Action Notice

After a class has been certified, the courts generally require that notice be given to potential class members. This notice is the email, letter, or TV commercial that informs people of the lawsuit and how they can become a part of the class. Notice is important because it alerts people that they may be entitled to some compensation. Once individuals receive notification, they can choose to either join the class action (“opt in”) or choose not to participate (“opt out”).

For example, a woman taking the Yaz birth control pill may be unaware that her recent heart attack may have been linked to the drug. However, notice of a class action suit against the maker of Yaz will provide her with information about the drug’s reported side effects and let her know that she can seek compensation for her injuries by joining the class action.

The Advantages and Disadvantages

Class actions allow a large number of people to pool resources together and collectively pursue claims that wouldn’t ordinarily be cost-effective to pursue as individuals. As a result, they’re most beneficial when a large number of individuals have suffered relatively minor injuries.  Class actions can be less financially burdensome on individuals because lawyers will often represent class members on a contingency fee basis, meaning the attorneys aren’t compensated unless the class members reach a settlement or win the case. Attorneys will sometimes bear the litigation costs upfront as well, so class members don’t have to pay anything out of pocket.

A potential disadvantage is that once people opt in to a class action, they are basically bound to the result of the lawsuit. As a result, a class member who is unsatisfied with a class action settlement may be prohibited from filing an individual lawsuit later to receive a more favorable settlement or award.