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Read the newspapers, watch TV or surf the web on any given day and you’ll likely come across something about a class action lawsuit. Do you know what they’re supposed to do and how they work?
Find out what’s behind all those TV ads and the class action settlement notices you receive in your mail from time to time. A class action could mean the chance to resolve a legal claim, large or small.
What and Why of Class Actions
You may have a legal claim connected to a problem with a product or service, but righting the wrong through a lawsuit just isn’t practical for you. Sometimes, you and several others have the same legal problem, but again separate lawsuits aren’t practical or an efficient use of legal resources.
Class actions solve these problems by allowing representatives of a group to go to court and obtain a judgment or settlement benefiting all group or class members.
Common Types of Class Actions
Class action lawsuits have been used in many types of cases, such as
- Products liability claims, like health products and drugs, electronics, automobiles, tobacco and building materials
- Claims related to services, such as phone, banking, cable tv and other consumer services
- Corporate and securities issues
- Employment claims, like discrimination and wage and hour law issues
Class Action Prerequisites
Class actions are governed by federal and state court rules. A class action can’t take place unless the requirements in these rules are met:
- Numbers. There have to be so many possible plaintiffs and lawsuits against a defendant that it’s not practical for them to file their own suits. Often, possible plaintiffs number in the hundreds or thousands
- Same claims. Claims need to raise common legal and factual issues, making it efficient to deal with all claims together. Thousands of claims against a manufacturer for a faulty dishwasher switch causing a fire hazard is a good example
- Typical cases. The named plaintiffs, the representatives, have the same claims and defenses as the others in the class. In the dishwasher example, the named plaintiff’s claim can’t be connected to defective pump causing flooding
- Representatives provide fair and adequate protection for the class. The named plaintiffs and class lawyers must look out for the interests of everyone in the class. The lawyers’ competency is the main focus here, but courts look at the representatives, too
A court must certify the class for the lawsuit to go ahead as a class action. The court sees if the above elements exist, and it certifies the class if a class action is the best way to manage the claims. Certification is usually granted when the class wants the defendant to do or stop doing something, such as stop making or fix the defective dishwasher switch.
Next Steps for the Case
Once started, the case could take more or less time to resolve than an individual lawsuit. Much depends on the defendant and how hard it fights the class’ claims. Also, both sides of the case continue investigating the claims, which takes time.
A case may go on for years. A judge or jury may decide who wins, but quite often class actions end with a settlement.
Next, Proposed Settlement and Opting In or Out