How do class action lawsuits work?
In a class action lawsuit, many plaintiffs sue one or more defendants.
One team of lawyers represents all the plaintiffs, who each share equally
in any damages awarded to them.
Why are class actions needed?
In some situations, the individual lawsuits would be too small and numerous
– hundreds or thousands of suits for tiny damage amounts would
only tie up the courts and create huge legal fees. For example, Blockbuster
Video lost a class action lawsuit for overcharging on late video rental
fees. Each individual member of the class was entitled to approximately
$50 or less. There would be no point in trying to sue a huge corporation
for $50. But Blockbuster overcharged thousands of customers, so combining
them into one case not only saved the effort of all those separate cases,
it gave the members of the class a much stronger legal voice than they
would have had individually.
Who pays the lawyers in a class action suit?
The lawyers are paid from the damages awarded in the case. They usually
get 25 percent, but the court can adjust that number.
How does a case become a class action suit?
There are several criteria that must be met before a judge will certify
a suit as a class action. There isn’t a hard set of numbers –
judges just consider these factors before certifying a suit. The first
is the number of plaintiffs. If there are only two or three people involved,
the suit won’t qualify as a class action. It’s also very
important that all the plaintiffs have common circumstances, damages,
and legal arguments.
Could you explain mature versus immature torts?
Another criterion that has been used recently is the “maturity”
of a suit. The best way to explain this is with an example – when
the first class actions suits against tobacco companies were attempted,
judges refused to certify them because there hadn’t been any individual
cases of the same nature. They were considered immature torts. After
a few individual cases had been tried, there was some legal precedent
to base decisions in a class action on – they were then considered
mature torts.
What are some disadvantages of class action suits?
Class actions are very complex, and can be very expensive to prosecute
and defend. Also, forcing all the plaintiffs into a single common complaint
can be a problem if some of the cases had individual differences. In
cases where emotional distress and other intangible factors affect the
individual cases, it might not be a good idea to shoehorn them all into
a single class action. Finally, class actions remove control from the
individual plaintiffs, not only because they are part of a large group
of plaintiffs, but also because the complaints might have come from
many states across the country. The case might be tried far away from
any one plaintiff, making it difficult for them to attend.
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Some frivolous class action suits have left a bad taste in people’s
mouths, but these suits are the best way for individuals with limited
resources to get relief when large corporations have wronged them.
Resources for finding out if you are owed money as a result of a class
action:
Stanford Law School Class Action Clearinghouse - http://securities.stanford.edu/
Central notice - http://www.notice.com/classactions/
