Commercial Litigation Lawyer
A class action lawsuit is a legal mechanism that allows a group of individuals, known as the “class,” to collectively sue a business or entity for alleged wrongdoing. This type of lawsuit is particularly effective when a large number of people have suffered similar harm due to the actions or negligence of a business. Class action lawsuits provide an efficient way to seek justice, consolidate claims, and ensure that individuals with smaller claims have a means to seek compensation without bearing the full burden of litigation costs.
With that said, and as an experienced commercial litigation lawyer – including those who practice at Eric Siegel Law – can confirm, class action lawsuits can be a logistical and PR nightmare for companies that have not engaged in wrongdoing but are being targeted due to misunderstandings and/or bad faith.
Initiation and Certification of Class Action Lawsuits
- Filing the Lawsuit: A class action lawsuit is typically initiated by one or more individuals, known as the “lead plaintiffs” or “class representatives,” who have been affected by the alleged wrongdoing of a business. These individuals work with their legal representatives to file a complaint against the business, outlining the claims, damages, and legal theories.
- Class Certification: After the lawsuit is filed, the court evaluates whether the case meets the requirements for class certification. To be certified as a class action, the lawsuit must satisfy certain criteria, such as having a sufficiently large group of people with similar claims, common legal and factual issues, and the class representatives’ claims being typical of the class as a whole.
- Notice to Class Members: If the court certifies the class action, it will determine the scope of the class and issue notices to potential class members. These notices inform potential members of their inclusion in the class and provide them with the opportunity to opt-out if they wish to pursue individual claims separately.
Proceedings and Outcomes of Class Action Lawsuits
- Consolidation of Claims: Once certified, the class action lawsuit consolidates the claims of all class members into a single legal proceeding. This consolidation streamlines the litigation process and prevents multiple individual lawsuits from overwhelming the court system.
- Discovery and Pretrial Proceedings: Both parties engage in the discovery process, where they exchange relevant documents, evidence, and information. Pretrial proceedings, including hearings and motions, help shape the case’s parameters before the trial begins.
- Trial or Settlement: Depending on the circumstances, the class action lawsuit may proceed to trial or be settled out of court. Settlement discussions are common in class actions, as they offer a way to efficiently resolve the case and provide compensation to class members without the need for a lengthy trial.
- Approval of Settlement: If a settlement is reached, the court must approve it to ensure that it is fair, reasonable, and adequately compensates class members. Class members are given an opportunity to object to the settlement terms before it is finalized.
- Distribution of Compensation: In cases where a settlement or verdict is reached in favor of the class, compensation is distributed to eligible class members. The distribution process is overseen by the court to ensure fairness.
- Attorney Fees: Attorneys representing the class are often awarded fees and expenses, which are subject to court approval. These fees are typically a percentage of the settlement or judgment amount.
- Opt-Out and Individual Claims: Class members who chose not to participate in the class action or who opted out retain the right to pursue individual claims against the business. However, opting out means they will not be bound by the outcome of the class action.
Class action lawsuits provide a way for individuals who have suffered similar harm to collectively seek justice and compensation from businesses responsible for alleged misconduct. They can also be truly burdensome for companies who have been named as defendants in such actions, which is one of the reasons why affected businesses need to seek legal guidance as soon as possible.