Class Action Suit Explained

Class Action Fairness Act

"Class Action Law Suits" [Web Search]

Evidence of Fraud

Class Representative

Who Should Join

What Is a Class Action Lawsuit?

Definition and Examples of Class Action Lawsuits  Updated July 21, 2020

The Balance Small Business

BY MARIANNE BONNER  

A class action lawsuit is a legal action filed by more than one individual against a single defendant. It's designed for situations in which several people have suffered similar injuries as a result of a defendant's actions. Class action lawsuits are appropriate when the damages claimed by each plaintiff—the person who's alleging wrongdoing—are too small for individual claims to be worthwhile.

These plaintiffs have the resources to hire an attorney and obtain restitution by filing the legal action as a group. Class action lawsuits also relieve courts of the burden of hearing hundreds or thousands of small claims cases.

Class Action suits are for situations in which several people have suffered similar injuries as a result of a defendant's actions. Class action lawsuits are appropriate when the damages claimed by each plaintiff—the person who's alleging wrongdoing—are too small for individual claims to be worthwhile.

These plaintiffs have the resources to hire an attorney and obtain restitution by filing the legal action as a group. Class action lawsuits also relieve courts of the burden of hearing hundreds or thousands of small claims cases. [Continue to complete article]

How Class Action Lawsuits Work

A group or class of plaintiffs is represented by one or more "lead" plaintiffs. The injuries suffered and the allegations alleged by the lead plaintiffs must be similar to those of the other class members.

The class must be certified by a judge before the class action lawsuit can proceed. A lead plaintiff must demonstrate that the plaintiffs have a valid claim against the defendant and that all class members have similar claims. The lead plaintiff must also show that the suit can adequately represent all group members—all with the assistance of legal counsel, of course.

The plaintiffs are notified by mail or other means after the class has been certified. All are automatically included in the lawsuit unless they opt out.

Plaintiffs who wish to opt out from the class action suit must follow a specified procedure. They'll remain part of the class unless and until they do so.

Most class action suits are settled out of court.; Each plaintiff receives a portion of the settlement, which can consist of cash, a refund, a service such as credit monitoring, or some other benefit.

20+ nations have Class Action Suits or similar suits

Argentina, Australia, Brazil, Canada, Chile, China, Denmark, Finland, Indonesia, Israel, the Netherlands, Norway, Portugal, South Africa, Spain, Sweden, Taiwan, and the United States. At least four more— Austria, England, France, and Poland—plus the European Union are said to be debating the adoption of such a procedure in their systems.

Class Action Law and Legal Definition

SOURCE: USLegal.com

A class action is a representative action wherein one or more plaintiffs actually named in the complaint, along with their counsel bring a lawsuit on behalf of themselves and the defined class against one or more defendants. The claims of the "class representatives" must arise from facts or law common to the class members. Most class actions are called "plaintiff class actions", where group of plaintiffs sue an individual defendant, however, a class action can be a "defendant class" action, filed against one or more defendants representing a group of defendants. A court will certify a lawsuit as a class action when there are too many class members for them all to be named as parties in the lawsuit.

In federal court, the procedures for certifying a class and the requisite elements for certification are governed by Rule 23, Federal Rules of Civil Procedure. Before a court certifies a class action, it must conclude that there are too many class members for them all to be named as parties in the lawsuit. Technically, class members do not "join" into the litigation, but decide to participate by not "opting-out."

Most class actions are filed for compensatory (money) damages. Class actions may also be filed to resolve disputes over a "limited fund," where the money available is inadequate to fully compensate all class members.

Occasionally, class actions are filed to seek a declaratory judgment, where the judge makes an official statement or interpretation regarding an issue, such as whether it is legal or illegal. Finally, a class action may seek injunctive relief, asking for the court to order the defendant to do or refrain from doing something.

If the constitutional and procedural protections required for fairness are met in the underlying action, all absent class members are bound to the judgment or settlement of the case. However, if the action is primarily for compensatory damages, absent class members are entitled to notice and an opportunity to "opt-out" (exclude themselves) from the proceedings. Generally, class members do not "join" into the litigation, but decide to participate by not "opting-out." If a person opts-out, he is not bound by any judgment or settlement of the class action and may file a separate lawsuit.