What are Class Action Lawsuits, and what are their Benefits?

Get everything you need to know about Class Action Lawsuits and what all is required to file a class-action lawsuit.

Commonly seen on television and heard on radio commercials, class action lawsuits often involve defective products or predatory lending schemes. 

A legal course of action where the plaintiff brings forward a lawsuit that benefits a larger group of affected people is called a class action. This group or class of people must attest that they were somehow affected by the defendant’s action; however, the case will get tried only by the lead plaintiff.

In this article, we will focus on class action lawsuits and the benefits of filing a class action.

Class action cases

A lawsuit in which a group of people with similar injuries caused by the actions or same product of the defendant come together to sue the defendant as a group is known as a class action lawsuit. 

Other forms of lawsuits filed by a group of people who have suffered similar kinds of harm or losses due to the defendant are “mass tort litigation” and “multidistrict litigation” (MDL”).

Class actions lawsuits serve justice to the people when their injuries have been caused by defective products, such as pharmaceutical drugs, motor vehicles, and other medical devices, and consumer products. 

Consumer fraud, corporate misconduct, employment practices, and securities fraud are common types of conduct over which people have sued as a class in the United States.

Mass-tort action

Mass-tort action is one of the types of class action lawsuits. Mass tort litigation involves multi-party lawsuits based on huge accidents. 

For example, An airplane accident, in which many people get injured and lose lives, or widespread personal injuries caused by a defective product, such as medical devices

Suppose you or your loved one got injuries from a product or person, and you have reasons to believe that there are other people in a similar situation as yours. In that case, you should seek legal help from an attorney who has experience in representing classes of injured people in class action lawsuits. You can learn more about class action lawsuits and seek the legal help of an attorney on the same on getlegal.com.

What are class action lawsuits, and what is their purpose?

Class action lawsuits are court proceedings generally used when a group of people has suffered the same or similar kind of injuries. Often injuries sustained by many of the individuals are relatively minor, such that the individual does not pursue legal redress on their own. However, filing a lawsuit adds up the claims’ value and builds a strong case against the defendant.

Another benefit of class action lawsuits is listing of class action lawsuits means consolidating the attorneys, defendant, evidence, witnesses, and almost every aspect of the litigation. If the count of people affected by the product or actions of the defendant is high, it becomes impractical for every individual to file a lawsuit. 

In such a case, if a class action is permitted, the group of people who suffered come together. And file a lawsuit with a representative plaintiff called a “lead plaintiff” or “named plaintiff” at the forefront.

There are several examples of class action lawsuits. Class action lawsuits may get filed by the following class of people:

• An employees group subjected to race discrimination
• A neighborhood of residents whose homes of families got  injured by a toxic spill
• Several patients described a drug with injurious side effects
• A consumers group who purchased a defective product that caused their injuries
• Corporate investors who suffered fraud in the purchase or sale of stock and other securities

Notice to potential class members

Every individual affected by the court’s ruling in the class action lawsuits is entitled to notice that the action has started. It is usually impossible to give personal notice to each person involved in the class; however, all people who might be affected get entitled to the best notice possible.

The class representative of the class action lawsuits will be ordered by the court, through his/her attorney, to make reasonable means and number of attempts to notify any unknown class members by general media such as an advertisement in a newspaper or a magazine, television, or a posted flyer. The court will tailor the type of notice required that suits the particular facts of the case.

Those who get the notice than have the option to class action lawsuits to join – called “opting in” – or to decide not to take part in the case as a member of the class – called “opt-out” or open class action lawsuits. In some cases, opting out is not the opportunity given to the individuals. 

Suppose the action got filed over a particular form of injury caused by the defendant. In that case, all people who have suffered similar injuries automatically get included in the class and must live with the case’s outcome.

Class action lawsuits are complicated; they involve extensive research and complex legalities. The attorney experienced in class action cases has the knowledge required to get the desired outcome. The attorney will gather evidence to prove that the defendant’s product or conduct harmed the class. 

Click here to know more about notice to potential class members and class action lawsuits attorney on getlegal.com.

Benefits of class action lawsuits

Makes the process efficient:

The class-action lawsuits bring together and pass court ruling on thousands of claims at one time, making the process much more efficient. These claims, if filed individually, are impractical to litigate. The judge generally decides the basic question of who wins the lawsuit and in what regard. 

The class lawsuit gets dismissed if the defendant wins the case, and the individuals in the group are not allowed to file new or individual lawsuits over the same issue against the same defendant. On the other hand, the court finds the defendant liable, if the class of plaintiff’s wins and the amount of recovery later gets divided among plaintiffs.

Low cost of litigation

The class action format lowers the often-high cost of litigation as it aggregates small claims. Attorneys with thorough training, knowledge, and experience in litigating and managing complicated lawsuits bring class-action lawsuits. 

Although class actions are complicated and require much more work than the typical civil lawsuit, attorneys experienced in class actions have what it takes to represent the plaintiffs in the cases.

Seeks to ensure that all injured plaintiffs receive something

Class actions seek to ensure that all people who have suffered injuries by the action or product of the defendant receive something for the damages suffered. It may be the case that the party at fault is bankrupt or, for some other reason, cannot afford to pay each individual the amount necessary to cover his/her losses. 

Each party involved in the case receives something when the class wins the lawsuit. The amount necessary, not be enough to cover the entire damages. Absent a class action, payment by the defendant to the plaintiff would be on a first-come, first-served basis.

Opportunity to litigate

A class action allows plaintiffs to pursue a worthy cause even if each individual’s claim is not for a considerable sum of money. 

For example, a telecommunications company may be adding fees to the consumer bills without making them aware of it. While it may be impractical for one plaintiff to pursue a claim for a few hundred dollars, a class action lawsuit allows such litigants to get the justice they deserve.

Higher chances of financial recovery

One of the significant advantages of class action is that a judgment in favor of the plaintiff may mean they may see the money they get awarded. The earlier plaintiff may be the only ones who receive damages in a case where many plaintiffs sue the defendant around the same time if the defendant goes bankrupt. Class actions help ensure that damages recovered are spread fairly among plaintiffs.

Uniformity

Class actions see a greater degree of uniformity. The lawsuits allow similarly situated plaintiffs to recover damages likewise as done before. Additionally, along with plaintiffs, defendants also benefit from class actions in the cases where they know the resolution of similar cases at the end of a trial or a settlement.

Experienced legal representation

It is a huge thing for an attorney to take on a class-action lawsuit. Such cases involve thousands of pages of documents, extensive research, expensive expert witness fees, and years to develop the case. 

These types of lawsuits generally get handled by more experienced attorneys who have worked on similar cases in the past. These allow plaintiffs to have such skilled and experienced representation that they might not have had if they had pursued their claim on their own.

Greater efficiency

Along with benefitting the plaintiff and the defendant, class action lawsuits also help the judicial system. Since one judge determines the case in one court, the scope of inconsistent verdicts becoming an issue rules out completely. 

Class actions save a lot of time for the judicial system as it takes much less time than many similar cases tried at different times. It is the best alternative rather than clogging up court schedules, making it harder for everyone to find their court dates.

Class action judgments

In a class action, the court’s decision is binding to every participant who has opted into the class. All individuals who fit within the court’s definition of a class member are bound by the court’s final decision, even if the individual never visited the court or otherwise participated in the lawsuit.

A “plan of distribution” is usually followed in the class action for the payment of participants. The judge develops the plan with the help of parties and their attorneys to distribute the amount that the plaintiff class won in the lawsuit minus the amount charged by the attorney as fee and litigation cost. Each member of the class may receive a particular percentage of the total amount or a specific dollar figure.

The attorney seeks and obtains permission for an individualized, in-depth review of each participant’s claim in some cases to tailor the amount awarded to each class member to the value of their claim. The method of distributing money as per the value of the participant’s claim is relatively rare, especially in class actions of larger size.

When the class action lawsuit participants decide to settle, the judge ruling on the case must approve the settlement, making sure that the settlement offered to all participants is fair to all parties involved in the case.

Types of class actions

Securities litigation, civil rights proceedings such as consumer product liability cases, and school funding are the most common types of cases in class actions. Additional rules are laid out for securities class-action lawsuits by Congress in the Private Securities Litigation Reform Act (PSLRA) of 1995. 

Most of the successful class action cases often result in hefty pre-trial settlements. The lawsuit of Enron filed by the shareholder after the company’s collapse resulted in settlement of $7.2 billion. Another famous and top-class action lawsuit was the product liability case filed against Toyota for their faulty car brakes. The lawsuit resulted in a costly recall and over a $1 billion settlement.

Another major type of class action is no proof class action lawsuits. Click here to know more about class action lawsuits no proof on getlegal.com

Civil rights class action cases

These class actions typically involve requests for injunctive relief, meaning legal remedies instead of claims for payments. 

The Brown vs. Board of Education case was one of the most famous civil rights class actions handled by the Supreme Court in 1954, which struck down school segregation as unconstitutional. Such types of current class action lawsuits now face greater legal restrictions than ever before.

Attorneys in the United States typically take class action cases on a contingency basis, which means they would charge a certain percentage of any judgment or settlement fees made in favor of plaintiffs. The practice of contingency has been scrutinized over the years because, in some cases, legal terms payout can exceed the amount received by the plaintiffs.

The process of class action

District court must make the following findings to certify a lawsuit as eligible for prosecution as a class action.

• The members of class claims share common questions of law or fact
• The number of class members renders it impracticable to join them in the action
• The class representative will adequately protect the interests of each member of the class
• The defenses of the proposed class representatives are typical for the rest of the class

To conclude –

Class actions are lawsuits brought by plaintiffs to individuals or companies on behalf of a larger group of people. The class action seeks to rectify the damages incurred by the individuals involved in the class, usually through monetary gain. Class actions generally represent hundreds of people, and the settlement recovered in the lawsuit is usually divided amongst the entire group fairly, though not necessarily equal.

If you or your loved one got injured in a product’s side effects, mistreatment by your employer, or some other civil wrong that has affected people at large, the best means of redress is a class action. Accordingly, the best approach when seeking legal counsel is to find an attorney or a firm that understands the process of class action lawsuits.

https://www.getlegal.com/legal-info-center/intellectual-property-law/trade-secrets/