Class Action Lawsuits 101: Understanding the Basics

December 11, 2019 @ 9:30 am

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At some point in your life, you might have to decide whether you should opt in to a class action lawsuit. You might even be the person considering initiating one. When you’ve suffered harm and suspect that other people did too, a class action lawsuit can bring about change so that no one else is injured — and win compensation for everyone who was, including you.

Class action lawsuits give ordinary people an economical way of correcting unfairness and injustices. They allow the courts to make one decision instead of hundreds or thousands and provide for fair and equal treatment of victims. However, the actual compensation that class members receive may be small, and opting in on a class action usually bars you from pursuing additional, more substantive compensation that you may actually need.

If you’re debating the pros and cons of participating in a class action lawsuit, here are some facts that may help to clarify your options.

What Is a Class Action Lawsuit?

For the average person, pursuing a lawsuit against a powerful company, an established organization or a wealthy individual may seem too expensive and difficult. In some cases, the harm done may even seem “not that bad” if you are the only person it happened to. However, when an injury or injustice seems to have a pattern that affects many people, the harm can add up to a problem that needs a legal remedy.

A class action lawsuit offers a way for everyone who was harmed — a class of individuals — to obtain an equal share of protection, compensation or relief in a civil court without having to file individual lawsuits. Lead plaintiffs sue the defendant on behalf of the individuals who were harmed, and anyone who matches the definition of the class membership can benefit.

How Many People Do You Need for a Class Action Lawsuit?

Rather than specifying a certain number of people, the law states that “the class must be so numerous that joinder of all members is impracticable.”

  • Joinder is pretty much what it sounds like—the joining together of claims.
  • Joinder is fairly common in personal injury lawsuits. Multiple parties may be joined in one lawsuit, but each party is still addressed individually.

To approve a lawsuit as a class action lawsuit, a court must be able to see that the numbers of people harmed are so similar and so great that joining them all in another type of lawsuit would be too costly and inefficient for the court. Instead, a class action lawsuit can address the injustice without naming each and every affected class member.

On average, cases with at least 40 plaintiffs usually gain class action status, but in some cases, even just a dozen people may be enough.

How Much Does It Cost to Start a Class Action Lawsuit?

Since all plaintiffs share equally in any compensation gained from a class action lawsuit, expecting one or two people to bear the entire legal bill would be an unfair burden. Instead, most class action lawyers wait for compensation, collecting a percentage of the settlement only if the class action lawsuit is successful.

How Long Do Class Action Lawsuits Typically Take from Start to Finish?

Class action lawsuits are like any other lawsuit in that each has its own timeline. Some are settled within mere months while alterations, amendments, objections and appeals can extend others for years. However, each must follow certain steps:

  • Step 1. Complaint: An attorney files a class action complaint that describes the problem, the people affected and the compensation that the lawsuit will seek for the class of potential plaintiffs.
  • Step 2. Certification: A judge reviews the complaint and determines whether the case fits requirements for a class action lawsuit. If it does, the court will issue a certification order that recognizes the case as a class action lawsuit, defines who belongs in the class membership and appoints a class counsel to handle the suit.
  • Step 3. Notice: The court mandates that all possible members of the suing class must be notified of the significant details of the class action and must be given the option to opt in or out within a defined time frame.
    • Class members who opt in agree to abide by all of the class action suit’s terms, conditions and outcome.
    • Class members who opt out forego any compensation from the class action but retain options for pursuing their own individual lawsuit.
    • While potential class members may receive individual notifications through mail or electronic means, outreach for extremely large cases may use general news releases or published ads to encourage potential class members to contact the attorney handling the suit.
  • Step 4. Judgement: Most class action lawsuits conclude in a settlement, but regardless of where or how a case is settled, the court must approve the actionable steps and remedies agreed upon for the class membership.

Throughout the process, each step leaves room for modifications, refinements, objections, and appeals. Meanwhile, the focus is on identifying all potential members of the plaintiff class.

Do Class Actions Have a Statute of Limitations?

Statutes of limitations set a time frame for how long someone has to file a lawsuit. In Louisiana, the statute of limitations is typically as short as one year that begins on the date on which the harm occurred.

Class action lawsuits must be accepted or approved as a class action lawsuit within that time frame. If a suit is instead deemed inappropriate for a class action, the elapsed time is paused so that class members who still desire compensation can pursue a remedy either individually or by joining another eligible lawsuit.

Getting Started

At Morrow, Morrow, Ryan, Bassett and Haik, our lawyers have extensive experience in handling class action lawsuits. If you would like more information on these types of cases or get an objective assessment of what you might stand to lose or gain from your involvement in one, contact our team today. Schedule your free consultation online or by calling 800-356-6776, and let us help you determine the legal action best suited for you.