What is a Class Action Lawsuit?
In a legal sense, a class action lawsuit is a form of suit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This type of legal action originated in the United States. However, in several European countries, changes have been made to the legal system to allow consumer organizations to bring claims on behalf of large groups of consumers, similar to the processes used in the U.S..
Class action lawsuits are most often seen in relation to pharmaceuticals and drug companies, usually related to injuries or deaths associated with a particular product or drug. In other cases, many public companies face class action suits related to the trading of their stock and dividend matters.
Class action lawsuits may appear to offer an advantage to individual plaintiffs because they aggregate a large number of individualized claims into one representational lawsuit. However, if a lawsuit is won against the defendant, the plaintiffs in the case usually only receive a very small amount of compensation. It is usually the attorneys and legal teams that end up making millions. Many people who receive a notice of a class action lawsuit in the mail do not complete the steps necessary to make a claim. The attorneys and lawyers involved in the process make the claims process confusing and laborious, seemingly in an attempt to reduce the number of claims made by individuals. This results in a larger pot of money for others, including the legal group involved in administering the suit.
These types of lawsuits are generally viewed as an important and valuable part of the legal system when they permit the fair and efficient resolution of legitimate claims of numerous parties by allowing the claims to be aggregated into a single action against a defendant that has allegedly caused harm.
However, the typical class action suits end up benefiting the attorneys who file the suit. The burden is often placed on the individual to file a claim and provide proof of wrongdoing. Sometimes the burden is so great, that individuals don’t bother completing the requirements of the class action suits. This ultimately ends up padding the pockets of the attorneys.
For more information on Class Action Lawsuits, visit the websites below:
- Top Class Actions – A website dedicated to large settlements.
For more legal definitions, visit our Glossary of Legal and Investigation Terms.