Class action lawsuits are a part of civil litigation that allows a large group of people to file suit and seek compensation from a major corporation or wealthy private party. The purpose of a class action lawsuit is to level the playing field, giving those who wouldn’t otherwise have the money to take on the defendant an opportunity to get what is fair.

The Making of a Class Action Lawsuit

The start of a class action lawsuit is typically an act by a major corporation that affects a large group of their customers. It might be something as small as a clerical error; in many cases, the cause is a direct decision the corporation makes that goes against the contract it has with its customers. The result is that the defendant collects money that it is now lawfully owed.

Common examples you might have been notified of or hear about in the news include banks charging unfair credit card fees, utilities charging rates or fees above what is allowed, or an automobile company refusing to recall a vehicle with a defect that might lead to serious consequences.

Typically, one or more customers notice the error and complain. When the corporation refuses to redress the error, one or more of the customers talk to a litigation attorney. It doesn’t make financial sense to sue the corporation as an individual – spending thousands of dollars to recoup a few hundred dollars or less in most cases.

But if it is discovered that the problem is widespread, affecting tens of thousands of customers in some cases, then class action lawsuit lawyers see an opportunity. They structure a class action lawsuit in which they will be compensated out of any settlement and the customers will get money returned to them.

The lawyers almost always take a class action lawsuit on a contingency basis. Their fees come from any settlement that results. If they lose the suit, they get nothing.

How a Class Action Lawsuit Works

Once the lawsuit has been filed, the court directs the class action lawsuit lawyers to notify all potential customers who might have a claim against the defendant. All those who wish to join the lawsuit may do so on equal footing with all others who are suing the corporation, including the customer or customers who originally filed the suit.

If you are notified of a class action lawsuit, you have the option to participate or to opt out. In almost all class action cases, if you don’t specifically opt out through written notice, you become part of the class. If you opt out, you’ll have no part in any potential settlement, but that doesn’t preclude you from starting your own lawsuit.

Again, however, it’s not usually possible for just one customer to pursue redress in these cases where the compensation to each plaintiff is relatively small.

If you choose to be part of the suit, any settlement given by the court will become final for you. The terms of your involvement will preclude you from taking any further action against the corporation.

How Long Do Class Action Lawsuits Take?

They are fairly lengthy, first because there needs to be a significant time period during which customers have the option to become plaintiffs. Then the process of discovery starts, with class action lawsuit attorneys for both sides gathering information and conducting depositions of potential witnesses.

Most class action lawsuits are settled before they go to trial. The corporation negotiates a deal considered fair to both sides. The court must approve it. When approved, payouts to the customers are part of the suit are to be paid immediately.

If you’re a part of a class action lawsuit, expect the process to take a minimum of 6 months and more likely 12+ months. It’s during this time between a judgement and payout that many plaintiffs look into a structured settlement loan, or lawsuit settlement funding, which is paid back with interest, when they receive their own disbursement.

Alternatives to Accepting a Class Action Lawsuit Settlement

If you are part of a class action suit – have not opted out – and believe the proposed settlement is unfair, you can file notice using your own legal representation. If you win your action, it will change the direction of the entire lawsuit.  In some cases, to get you to drop the issue, you’ll be compensated with a payment negotiated by your attorney and attorneys for the corporation.

While this is a difficult strategy, and you will have to pay for your legal representation, it offers the highest payout. At times, several or many members of the class will object to the settlement using the same attorney. This reduces their individual feels while maximizing a potential payment from the corporation.

Getting Legal Advice

If you are notified of a class action lawsuit, or if you are already a member of a class and you believe a proposed settlement is unfair, it might make sense to speak to class action lawsuit attorneys to discuss your options. Most will offer a case evaluation for free, so you’ll know your options with nothing out of pocket.