In class action litigation, a number of people file a single lawsuit to address a wrong they have all sustained. However, many people are not sure if they should become one of the plaintiffs, collectively referred to as a class.
At the same time, some advocates try to dissuade claimants from joining these lawsuits, arguing that they make plaintiff attorneys wealthy but do little for the claimants. The reality is more complicated, but even if it were true, that’s an argument to reform the system. It has nothing to do with an individual’s decision to join a suit or not.
Most of the time, you should join a class if you’re eligible to do so — if for no other reason than that very few others will.
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Understanding the Rationale for Class Action Lawsuits
Class action cases are intended to result in more efficiency in the courts, as one trial can resolve thousands of claims. At the same time, class actions can hold wrongdoers accountable for their actions, even when no one person sustained a significant injury.
For example, a large company might overcharge a million people an extra $5 for their purchases. It’s unlikely that anyone would sue the company over $5, but collectively, the business stole $5 million from its customers — more than enough to justify a lawsuit, says Jeff Feldman, professor from practice at the University of Washington School of Law.
It’s Not Always Your Choice to Join a Class
One of the first things people should understand about class actions is that it isn’t always up to them if they are going to be class members. It depends on the claim itself, Feldman says.
For example, people cannot opt out of membership in civil-rights-related claims. Say that a group of inmates file a lawsuit against a prison, alleging that the prison staff treats the inmates unfairly and must improve its conditions.
In such a case, all of the relevant prisoners would automatically be included in the class.
It’s only when the lawsuit demands cash as compensation that people can decide whether to become class members. In that situation, the law grants people the ability to file their own lawsuits, he says.
Still, even in those cases, the default position is frequently that everyone is automatically a class member. In those cases, people must send a notice that they opt out of the class.
In other words, rather than joining a class, what people are actually doing is leaving the class they were already in.
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Yes, You (Probably) Should Be in the Class
The main reason someone should refuse class membership is if they intend on filing their own lawsuit and they believe they can get a larger amount on their own.
In some large, complex cases, that is possible. And since class action cases may take years, even to obtain a court-approved settlement, “sometimes it’s easier to settle an individual case than the entire case,” Feldman says.
However, if an eligible member does not plan on filing an independent lawsuit, there’s no obvious downside to being a member, he says.
Typically, the lawyers handle the entire case at their expense, and class members aren’t required to do anything but wait for checks to arrive.
Your Not Joining Is Someone Else’s Gain
As few as 5% of eligible members come forward in class action lawsuits. This is significant because class members usually win a percentage of a settlement fund, which is divided by the number of claimants.
The fewer claimants there are, the more money each claimant receives. So not joining may only hurt the eligible members who missed out on the award.
Joining a Class Isn’t the Same as Accepting the Settlement
A class member is not required to accept the terms of a settlement.
On the contrary, class members have the right to go to court and argue why the court should reject the settlement. Meanwhile, those who opted out of the class forfeited their right to object.
Becoming a Class Representative
In each class action case, there are individuals who become plaintiffs named in the lawsuit. These plaintiffs become the class representatives, and the lawsuit lays out the facts relating to these class representatives who are supposed to be sufficiently representative of everyone in the class.
Class representatives may be required to appear in court, participate in depositions and take part in other relevant proceedings. They should be prepared for discussion about them in courts and in the court of public opinion. In most jurisdictions, class representatives can receive a fee for their contribution to the case.
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If a Notice of a Class Action Comes, Is It Real?
Identity thieves are creating false class action suit notices to target victims, and false notices make up a significant source of internet fraud, Feldman says. Therefore, if you receive a notice — particularly one sent by email rather than through the mail — don’t immediately surrender your personal data in hopes of getting an award.
Instead, research the lawsuit before submitting any information to the requester. Class action cases are a matter of public record. They can result in some news coverage, while companies may be required to make public statements regarding settlements. There are also other avenues to verify the information, such as a Stanford Law School website inventorying securities-related class actions.
It’s worth a few minutes of your time to confirm the notice’s legitimacy. The last thing you want to do when joining a class action to remedy some damage you’ve suffered is to be harmed by someone else.
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Should You Join a Class Action Lawsuit? originally appeared on usnews.com
