This type of legal procedure is designed to enable a group of people who've suffered the same or similar injuries incurred by the defendant's products or actions to seek restitution.

According to the professionals at Diamond & Diamond, it's more cost-effective for a collective to pursue one large claim instead of multiple smaller ones. The main requirement for filing a mass action is that the individual's issues have to be related to the groups. If it's too diverse, the matter typically becomes a Mass Tort.

This type of lawsuit is settled on mass, and all class members are bound to the outcome. However, each member can opt-out of the combined effort and pursue legal action on their own.

What Motivates a Class Action Lawsuit?

Class actions are often filed against:

  • Financial institutions

  • Government entities

  • Retailers

  • Manufacturers

  • Employers

These actions are filed for various reasons, including:

  • Allegations of false advertising

  • Defective products

  • Unlawful employment practices

  • Discrimination

This type of procedure only makes sense when various claimants band together to increase the lawsuit's value. Furthermore, it makes the suit more efficient by allowing for the consolidation of evidence, witnesses, attorneys, and many other litigation aspects. The federal rules governing class actions can be found in the Federal Rules of Civil Procedure 23.

How Are the Class Members Found?

Typically, the court will tailor the type of notice fitting the facts of the case. This notice will then be placed on television, newspapers, posted flyers, or ads in magazines. This gives everyone affected the option to come forward and participate in the lawsuit. As soon as all the members are identified, they can either join the suit or go on their own.

How Does it Work?

Every class has one or more lead plaintiffs that act on behalf of the collective. All allegations and suffered injuries presented by these representatives have to be similar to those of the other members.

A judge has to certify the motion before the lawsuit can proceed. It's the lead plaintiff's responsibility to illustrate that all the collective cases are similar and that the claim against the defendant is valid. Furthermore, he needs to show that, with legal counsel's assistance, the suit can adequately represent all group members.

The court will notify the plaintiffs by mail after the class has been certified. These cases are typically settled out of court, and everyone will receive a portion of the settlement.

The Pros and Cons

Pros

  • It reduces the number of suits holding up the courts.

  • It provides plaintiffs, who could otherwise not afford the legal costs, the opportunity to get restitution.

  • It ensures equal and fair treatment of defendants with similar injuries.

  • Due to the number of plaintiffs, the defendants are motivated to settle.

  • It reduces litigation costs.

Cons

  • Due to the complicated procedures involved, these cases typically take a long time to settle.

  • The individual plaintiffs' award is usually small compared to the fees earned by the attorneys.

  • All class members are affected by the quality of the legal representation.

  • The lead plaintiff and their attorneys are in control of the suit.

  • Plaintiffs have to accept the agreed-upon form of compensation, which is often coupons or rebates instead of cash.

  • The individual plaintiffs aren't entitled to sue the defendant independently.

To Wrap Things Up

Class actions are complex lawsuits that can potentially take years to settle. Furthermore, due to the number of plaintiffs, the individual's compensation for incurred damages may not amount to much. However, it allows people who aren't in a financial position to sue the opportunity to seek restitution.