WHAT IS A CLASS ACTION LAWSUIT?
A class action lawsuit is a procedural mechanism that allows a group of similarly situated people to prosecute a claim collectively. The class action reflects economic necessity. Despite the existence of laws protecting consumers from corporate misfeasance, the cost of seeking judicial redress on an individual bases is often outweighed by a potential recovery. A consumer with relatively small losses would quickly be consumed by legal fees, making an individual action economically unfeasible. The class action solves this problem allowing a single consumer to file suit on behalf of thousands of others.
The class action mechanism can be used in many scenarios where the wrongdoing affects are large group of people in the same way. For example, class actions have been brought against the following: car manufacturers for defective autos; food companies for false labeling or misbranded products; banks and insurance companies for unlawful fees; businesses for unwanted robocalls and texts to name a few.
While highly individualized issues such personal injury, pain and suffering are not suitable for class action treatment, most actions seeking some form of economic damages (e.g. refund for cost of a product or remuneration of an unjust fee) are.
WHAT ARE THE FEES AND EXPENSES ASSOCIATED WITH A CLASS ACTION LAWSUIT?
The fact that the lawsuit is brought on behalf of a large group of people, enables attorneys to represent the class on a continency fee basis. This means that neither the representative plaintiff nor class members have to pay for attorneys’ fees or expenses out of their pocket. Rather, Attorneys’ fees, if any, will be paid separately by Defendants or paid out of the gross sum paid by Defendants to the Class. If no monetary sum is obtained or payable from Defendants or others, then Client is not required to pay anything to his/her attorneys.
WHAT IS A REPRESENTATIVE PLAINTIFF?
While the class action mechanism allows for the collective prosecution and redress of a common claim, every class action needs to be initiated by a person with standing (i.e. a person who has suffered damage from the alleged wrongful conduct) and is willing to represent not only him/herself but the entire class of similarly situated people. This person is called the representative plaintiff and leads the litigation on behalf of a class.
The power of class action litigation is that one person can step forward to represent thousands of others. This person will not only be the named person on the complaint but will typically also be proposed as the representative of the class. This person must be principled and willing to represent not only his/her interests but those of the entire class. The representative plaintiff acting on behalf of a class is expected to: communicate with his/her attorneys; remain generally knowledgeable about the litigation; and to participate by providing relevant documents and testimony.
WHAT CAN I EXPECT TO GET FROM A CLASS ACTION?
A typical class action has two goals: (1) stop the company from continuing its unfair or unlawful business practices and preventing such conduct from occurring in the future; and (2) economic damages for aggrieved class members in the form of money or repair/replacement costs. While economic compensation is important, non-monetary compensation such as the cessation of the unlawful conduct and improved business practices going forward, cannot be understated as they provide long terms benefits to consumers. Every class action is different. They are often complex, heavily contested and can take years to litigate without any guarantee of success. When successful, however, there is no greater feeling than achieving a positive resolution on behalf of others.
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