In a class action, one person (or a small group of people) files a lawsuit on behalf of a larger group of people. The “larger group” – the group of people the lawsuit represents – is the class. When a lawsuit is filed, it will define the proposed class. Anyone who meets this definition will be known as a class member. The pursuit of a class action, as with any other legal matters, have no guarantees for success.
The person or persons filing the suit will be referred to as the lead or named plaintiff(s). He or she may also be known as the class representative. This person will work with the attorneys representing the class and will have control over the lawsuit and the direction it will take.
If the case succeeds, either as a result of settlement or judgment, the fees of class counsel will be either paid by defendant(s) directly or as a percentage of a common fund established by defendant(s) for the benefit of the class. In either scenario, the court must approve the amount of the fees to be paid to class counsel. The defendant(s) will also be responsible for reimbursing the costs of bringing the case, providing notice, and carrying out the terms of the settlement or judgment. Thus, in a successful class action neither the plaintiffs nor class members incur any out-of-pocket expenses.
Keep in mind that, in most cases, you are not the one who actually filed the lawsuit; so, technically, you can’t lose a class action.
If the case, however, is dismissed or a jury rules in favor of the defendant, both the person who filed the suit and the class members will not be entitled to any settlement money.
Furthermore, while you cannot “get in trouble” for participating in a class action, even one that is unsuccessful, you may be prevented from filing another lawsuit involving the same allegations. Essentially, the legal system has already given you – and potentially thousands of others – a chance to recover compensation, and, for whatever reason, decided that the claims alleged in the class action did not have merit or should not be resolved in consumers’ favor.
If you participate in a class action against your employer alleging workplace discrimination or violations of wage and hour laws, federal law protects you against retaliation by your employer.
If a class action is successful, the attorneys representing the class members usually receive a percentage of the amount that is recovered by the lawsuit or a fixed amount that is separate from the settlement fund.
The judge presiding over the class action must review the attorneys’ request for fees to make sure it is reasonable.
Although a lawsuit may be filed and proposed as a class action, it doesn’t officially become a class action until the judge in the case issues a ruling known as class certification. In granting class certification, the judge is giving the go-ahead for the case to proceed as a class action. In a federal case, the judge will certify a lawsuit as a class action only if the attorneys for the class are able to satisfy several requirements.
When you think about the class-action lawsuits mentioned above, they provide great examples of several benefits of filing a class-action lawsuit:
After you hire a class-action lawyer, one of the first things the lawyer will do is work with you to determine if your complaint is too small for a class-action lawsuit.
If your injury is too “individual,” it may be difficult to find other people with similar injuries caused by a product or a company. Or while there may be other people who have suffered in similar ways, there may not be enough to have your class-action lawsuit certified
Another factor may be the financial resources of a possible defendant. Would the potential financial reward be worth the time and effort involved?