In most cases, if you are described by the class, you become part of it automatically. You do not have to do anything to join the class. You will be bound by the result of the lawsuit and participate in any common fund of money the lawsuit produces for its members.
If you are described by the class, you can opt out of the lawsuit if you want to sue the defendant individually. If you opt out you will not be bound by the result of the lawsuit. Of course you also will not share in the judgment. Rarely will a class action be started on an opt in basis. If so you will have to file a claim form or request to join in the lawsuit.
Usually the notice of the lawsuit will inform class members what action, if any, they must take to participate. Class members may ask to intervene in the case as class representative or named party. This would be the case where the person wants to have some say in how the case is litigated.
Four factors determine if a class action is appropriate. First, and most obvious, there must be so many similar claims that it's more practical for them to be resolved in one lawsuit instead of several. This is called numerosity.
Second, the claims must be similar. They must share common factual disputes and/or common questions of law so that they can all be resolved in the same lawsuit. This is call commonality.
Third, the persons named as class representatives or named plaintiffs must have claims that are typical of the class. This is called typicality. The claims need not be identical, but merely representative of the average class claim.
Finally, the persons named as class representatives or named plaintiffs must be capable of adequately representing the class. This is called adequacy. Adequacy means representing fairly the claims of all class members, and not using the lawsuit to reap its benefits at the expense of other class members.
A typical class action might involve a defective drug with harmful side affects. It could be taken by thousands of people, satisfying the numerosity factor. The side effects may have caused liver damage or heart disease in these people. That's a common factual claim. And the drug maker should have known of the side effects and warned of them. That's a common legal question. If the class representatives have claims like this, and are up to the task of representing the class, the typicity and adequacy factors are satisfied. This is a good class and the case can proceed as a class action.
Cases in which courts have found an abuse of the system or improper or inadeqaute legal representation share one or more common traits. Here are some red flags to look for:
Fees in class actions must be approved by the court. When red flags like these are present, plaintiffs or class members should consider filing an objection to the fee application. Although these red flags don't always signal trouble, raising the issue and clearing the air should reconcile everyone to the appropriateness of the fee.
A class action is a lawsuit filed on behalf of a class of people with similar claims against a defendant. The action is filed by one or a few class representatives or named plaintiffs. When the action is filed the court will determine whether it is appropriate to proceed as a class action. Four factors go into this determination. These are called:
Sometimes the class can be a group of defendants who are said to have done something wrong. This is very rare in comparison to a class of plaintiffs.
A typical class action involves hundreds or thousands of people who have been injured by a defective product. Class actions may be filed against a drug maker if the drug turns out to have bad side effects that injure a number of people. Banks can be sued in a class action if they improperly charged overdraft fees to hundreds or thousands of clients. Many class actions have in common claims that are relatively small on average. The small claim size makes the claim not cost-effective to file a lawsuit on an individual basis. If hundreds or thousands of these claims are put together in one lawsuit though, all of the claimants can get some relief, and it can be done very efficiently.
Class actions follow most of the same rules as individual lawsuits. In addition they have their own rules, mostly related to the special procedures adopted for the class action form. Perhaps the most important rules relate to certifying the class and deciding whether the class action is the appropriate means for resolving the claims. Federal Rule of Civil Procedure 23 governs this in federal courts. Information about this rule and class actions can be found at the Federal Judiciary Homepage.
Class action lawyers usually are paid from the fund recovered from the class. Increasingly they are paid a percentage of the money they recover. This percentage may vary but it can be from 25 percent to 33 percent of the fund. The fees may also be based on the amount of time the lawyers spent on the case and the quality of the result they obtained. This is called the lodestar method of calculating attorneys' fees.
Sometimes lawyers are paid not from the fund received for the class but by the defendant. There must be what's called a fee-shifting statute for this to happen. It is normally the case in American justice that each party pays its own legal fees. Some laws however make the defendant pay the plaintiff's fees if the defendant has broken the law. Example of such laws include some consumer protection statutes and labor and employment laws.