A class action is a lawsuit brought by an individual or company on behalf of a much larger group of persons with the same or similar problem or injury. A class action is ideal where a person or entity feels (a) he/she/it has been injured, (b) that others may have been injured in the same manner, and (c) bringing an individual law suit may not be practical because it will be too expensive relative to the individuals loss. A person may also feel that the wrongdoer has greater resources at its disposal and that an individual suit would be fruitless. In these instances, an individual or group, as a “representative” of the larger group, may bring a Class Action lawsuit on behalf of tens, hundreds, or even millions of others who have been similarly injured. In this way, a much larger group may be represented in court with lawyers working on a contingency basis when otherwise their claims would not have been brought. Class Actions are different from Derivative Actions, but they are sometimes brought together. [top]
2. What are the benefits of a Class Action?
Class Actions are based on the idea that there is strength in numbers. Class Actions allow individuals who would not otherwise be able to bring a lawsuit to do so in order to challenge unfair, unsafe, or illegal practices. While a Class Action may seem overwhelming to a single individual, this type of suit can successfully bring about reform or stop unfair practices more successfully than can an individual lawsuit. In the past, Class Actions have promoted civil rights, prisoner rights, and the right to fair housing and medical care, as well as the rights of consumers in insurance products, securities fraud, and antitrust practices. Class Actions have promoted the rights of persons injured by asbestos, Agent Orange, the Dalcon Shield, breast implants, cigarettes, defective tires, defective vehicles, and many other defective and harmful products. Often, it is the possibility or eventuality of a Class Action which helps the government enforce its laws, makes business practices safer, keeps unfair business practices in check and compensates consumers or investors for wrongdoing that harmed them. [top]
3. How do I know if I have a Class Action lawsuit?
Various laws are in place to protect your rights as a consumer or investor to prevent businesses or other entities from injuring you or treating you unfairly. However, the government clearly does not have the resources to monitor every action a business takes and to enforce all of those laws. Inadvertently or deliberately, a business or other entity may violate a law or contract or act in a way that it is unfair, illegal or unsafe for the public. It may be on such a small scale at the individual level that the violation goes unchecked, but the same violation is taking place over and over again, affecting dozens or millions of people. This is a classic situation leading to a Class Action lawsuit. Corporations may not correct a wrong voluntarily where doing so is expensive, unprofitable or embarrassing. In bringing a Class Action you will be seeking to end an unsafe, unfair and/or illegal activity and obtain compensation for the Class. [top]
4. What does it cost to bring a Class Action?
It does not cost the person(s) bringing the class action any money to bring the lawsuit because such cases are brought by attorneys working on a contingent fee basis. “Contingent fee” means that attorneys do not get paid unless the lawsuit is successful. The attorneys advance the money and manpower needed for the lawsuit on behalf of the representative and Class. If the Class Action is successful, the attorneys apply to the court for an award of their fees and reimbursement of expenses. It is up to the court to determine the fee, and the attorneys alone risk the possibility of their not getting paid. [top]
5. What is a Class Representative?
Only one Representative is required to bring a Class Action. A Class Representative is typically an individual or group that believes that it has been wronged, realizes that others are being injured similarly, wants the offending practice to end, and wants to be compensated with the other members of the Class for money damages. A Class Representative is one of the named or “lead” plaintiffs in the lawsuit. [top]
6. How do I become a Class Representative?
An individual or group that feels it has been wronged, and realizes that others are likely being injured as well, should consult a law firm that is experienced in and specializes in Class Actions. The firm will meet with that person and then examine the matter to determine the best course of action based on its evaluation of the merits of the case. If the firm determines to go forward in bring the Class Action, the individual or group would act as the Class Representative and the firm would typically work under a contingency fee arrangement. There may be more than one potential Representative. The firm would then bring the lawsuit in the person’s – or Representative’s – name, both individually, and on behalf of a defined Class of similarly situated persons. [top]
7. What is expected of a Class Representative?
The Class Representative(s) do not need to pay any money to bring the suit, but may have to provide paperwork and background information relative to the case. Over the course of the lawsuit, the Representative(s) may have to answer questions about the case, including in a deposition defended by their lawyers. The Representative(s) would be guided and assisted in these matters by their attorneys. Over the course of the lawsuit, which typically ranges from two to five or more years, the Representative(s) will be called upon to periodically assist in the suit. Represenative(s) will make all major case decisions with the advice of their lawyers. If the suit is successful, the Representative(s) generally receive extra compensation (with court approval) for their time and contribution. [top]
8. What steps are involved in a Class Action and does it last a long time?
First, a person or group that feels it has been wronged consults an attorney or law firm that has experience in evaluating and pursuing Class Actions. Then, the attorneys investigate the extent of the wrong and the best course of action to correct that wrong. A letter may be sent to the alleged wrongdoers to try to obtain the desired relief without litigation. If the firm decides to proceed with litigation, it may ask which persons wish to act as Representatives. Then, it will initiate a lawsuit with the Representative(s) as lead plaintiff(s). The attorneys will ask the court to certify the suit as a class action, and if the case meets the requirements it should be certified as a Class Action and move forward. Along the way, the plaintiff’s attorneys will provide the funds and manpower to litigate the case. As appropriate and with the Representative’s authorization, they may negotiate with the opposing counsel to obtain a reasonable compromise or settlement for the Class. Although every case is different, it typically takes several years to achieve a successful resolution to a lawsuit. [top]
9. What are some types of Class Actions?
Class Actions can arise in any instance in which large numbers of individuals or groups are injured. Sometimes a wrong is obvious, such as when a law or statute is clearly violated. Sometimes a Class Action can arise from more subtle but harmful behavior. In the past, categories of Class Actions have included persons injured by defective and harmful products (Products Liability Class Action). Class Actions have fought for employee or individual rights (Civil Rights Class Action). They have protected those injured by unfair, illegal, or deceptive business practices, particularly consumers of retail products, insurance products or other investments (Consumer Rights Class Action). Lastly, Class Actions have protected those injured through the purchase or sale of securities (Securities Class Action). In the future, different situations may give rise to different or new class actions that may not fit into any of the above listed categories. [top]
10. What types of Class Actions does this firm pursue?
We evaluate and pursue any and all types of potential Class Actions and Derivative Actions. [top]
11. What is a Derivative Action and why would someone bring a Derivative Action?
Derivative Actions generally arise when a company’s owners – its shareholders in a corporation or its policyholders in mutual insurer or bank – believe that senior management is enriching itself at the expense of the company. Derivative Actions and Class Actions are similar in many respects and are sometimes brought together. Attorneys determine whether a Derivative Action and/or a Class Action is/are appropriate depending on the legal issues in a case. In the typical Derivative Action, one or more of the company’s owners demand that their corporation take action against its directors or officers and/or others for wrongdoing that harmed the corporation. If the board of directors refuses to act, the shareholder(s) or mutual policyholder(s) may bring a derivative action against the alleged wrongdoers. In these actions, the suit is actually being brought to benefit the corporation (and thus its owners). [top]
12. What are the benefits of a Derivative Action?
Historically, Derivative Actions have been brought to obtain the return of compensation or property unlawfully taken by a corporation’s management (its board of directors, officers or executives), to remove management for violations of law, or to pursue in court persons who, although they own the company money or otherwise harmed it, management will not pursue.