A Basic Introduction on Class Action Lawsuits | mumble in the jungle

A Basic Introduction on Class Action Lawsuits


There have been numerous extremely high profile class action suits in the recent past that have received a lot of media attention. Most people however have only a very vague idea of what it is all about. Class action lawsuits seek justice for a number of people who have been affected adversely through a single suit. Filing a class action suit means that affected people do not have to file their individual cases seeking compensation for essentially what is the same claim. The advantage of class action suits is that they save valuable time of the courts and even those with small claims can participate for redress. Acting as a group has allowed individuals to fight large corporations and hold them accountable for their transgressions.

Types of Cases Ideal for Class Action Suits

Class action lawsuits can be broadly classified into four types; (a) Securities suits are usually brought about to seek redress for a group of investors seeking compensation for the improper conduct by a company that has been financially detrimental to them. (b) Product liability suits arise when a group of claimants seek action against a company that has launched a defective product that has caused harm, such as a drug or a vehicle, or an action such as an oil spill that has caused widespread damage. (c) Consumer class action suits can be commenced when consumers claim injury due to a company’s systematic and unlawful activities such as illegal charges on utility bills or penalties for late payments, or compliance failure with laws protecting consumers. (d) Employee class actions can be commenced by aggrieved employees seeking damages against violations of labor laws such as workplace discrimination, safety violations, worker welfare violations and unpaid overtime.

Commencing a Class Action

Usually initiated by one or more persons who feel that their rights have been violated, a suit needs to be filed by a lawyer, who also files a motion at a suitable time requesting the court to recognize it as a class action. Upon such grant, other people who may have been similarly wronged need to be notified so that they can participate in the suit as a class-member. Usually a number of people are required to make a suit a class action, however, even a single complainant is adequate if the class attorney has adequate reasons to believe that a number of other persons are also likely to be affected. Generally 30-50 people are required for a suit to be classified as a class action.

Class action suits are generally initiated by lawyers who bear all the expenses in the hope that the court will favorably dispose of the case and also award fees and reimburse the expenses.As per the terms of agreement entered into with the class action participants, lawyers may also be entitled to a share of the compensation. The lawyer bears the loss in case the suit is unsuccessful.

Reasons Why Lawsuits Should Become Class Actions

While there may be many motivations for commencing class action lawsuits, generally it has been seen to be more effective when the compensation is being sought from a powerful company that has all the resources to fight a long legal battle that will be too expensive for an individual claimant. A number of claimants, often gathered together by enterprising lawyers, can get together to fight the case collectively and obtain justice. It is the lure of getting high-figure compensation award that encourages lawyers to actively seek out cases with potential for class action. As far as the claimants are concerned such initiatives by the lawyer or his firm are always welcome because the case would have been impossible to fight on an individual basis. All legal expenses are borne by the lawyer, in exchange for a percentage of the compensation award, if successful, after setting off the expenses incurred.


Author bio: Sheryl Stone is an experienced lawyer who has participated in a number of successful class action suits. She also helps claimants to file for a lawsuit loan, at their behest.