What is a Class Action Lawsuit?
In a traditional lawsuit, one party sues another to right a wrong. However, sometimes a particular wrong may affect a large number of individuals. If each of these people brought their own lawsuit against the wrongdoer, the numerous small cases would clog the court process.
When a group of people have been affected by the same wrongful situation, a class action lawsuit may be in order.
Class action is a type of lawsuit when one person (or a few people) sue a negligent party on behalf of the entire group of people who could have incurred damages, known as class members. The person filing the legal complaint is known as a class representative or lead plaintiff.
Efficiency
A class action lawsuit allows the claims of all class members to be resolved more efficiently in a single proceeding rather than being drawn out in multiple court battles.
In these types of lawsuits, there is only one judge and one courtroom handling the case, reducing repetition and making the process faster and smoother for all parties involved.
When a company faces multiple lawsuits, the outcome of one lawsuit may affect another, so parties who file earlier may receive more compensation while the precedent of another ruling may leave others without any compensation. The benefits of a class action are that they establish a uniform standard.
Strength in Numbers
A class action empowers individuals to draw attention to corporate negligence or wrongdoing, in cases such as:
- Fraud
- Chronic wage theft
- Product defects
- Environmental hazards
- Data breaches
Even small damages can carry weight in court when the same cause impacts thousands of people. While filing an individual lawsuit may not be financially worthwhile, collective damages considered as a group increase the value and viability of the case and create pressure for the corporation to improve its business practices.
Class Representative
An individual (or a few people) with legal counsel can initiate a class action lawsuit on behalf of all parties affected. The class representative is the named party in the claim and the voice of the group. He or she plays a far more active role than other members, who simply wait to see the outcome of the case. He or she has significant responsibilities including:
- Communications with legal counsel
- Acting as the public representative for the case
- Fair representation of the class
- Acceptance of the settlement offer
In return for the effort, the class representative is the only member of the class who may be additionally compensated upon conclusion of trial. The court determines what additional compensation he or she receives.
Class Members
Class members have a passive role throughout class action litigation.
Potential class members may be notified directly or by advertisements after the court approves the case as a class-action lawsuit and/or after a preliminary settlement is reached.
If you receive notification of a class action lawsuit that applies to you, you can decide whether you want to participate.
In most cases, if you receive a notice, you will automatically be part of the class and no further action is required from you, unless you wish to opt out of the lawsuit. When you join a class action, you give up your right to file an individual suit against the defendant.
Class actions often end in settlement instead of going to trial, where compensation is ordered by a judge.
If the lawsuit is successful, compensation is awarded to all class members, regardless of the degree of harm they suffered. Because there is one judgment or settlement, all class members receive equal compensation, with the exception of the class representative.
If you have questions or concerns about the possibility of acting as a class representative or joining a class action lawsuit, call us today.
Contact the Arnold Law Firm at (916) 777-7777 to discuss your situation and possible developing legal options.