What exactly is a class action law suit?
A class action lawsuit is a lawsuit in which a person or business
acting as the plaintiff in a lawsuit represents a larger group
of people that have similar legal claims against a particular
defendant or group of defendants. For example, a homeowner or
consumer who is injured or whose property is injured by a defective
building product may bring a class action lawsuit against the
manufacturer of the product on behalf of himself or herself
and all other homeowners and consumers harmed by that behavior.
The person or business entity who brings the lawsuit on behalf
of the others is referred to as the "class representative."
The class representative serves in a fiduciary role to all others
who are similarly situated (i.e.,the "class" of members), much
like the board of directors of an association or a corporation
serves in a fiduciary role for the benefit of its members or
shareholders.
What function do class action lawsuits serve?
Class actions serve several important functions in our legal
system. Of primary importance, class actions enable a large
group of people injured by similar misconduct or a defective
product to have their claims joined together in a single lawsuit.
This is critical in situations involving hundreds or thousands
of class members, where individual damages maybe small compared
to the cost of a lawsuit so that no one individual would bring
a claim because it does not make economic sense for them to
do so. In this regard, a class action provides a way for persons
and businesses with relatively small claims that would not,
by themselves, justify hiring an attorney, to pool their claims
against an alleged wrongdoer.
This pooling of claims levels the playing field against a typically
larger and more well capitalized wrongdoer by leveraging all
of the smaller claims into one large claim to be handled in
a single case. The class of claimants gain "strength in numbers"
in making their claim that they would not otherwise have when
making an individual claim. This ability to form and bring a
class action consolidating the claims of many claimants into
one serves an important function of deterring harmful or damaging
behavior by persons or entities who have a responsibility to
deal fairly and reasonably with the public.
A class action further serves to save time and money to our
system of judicial administration. By allowing similar claims
to be lumped together in one case, a class action relieves the
extreme burden on our court system that comes from having jury
after jury seated to listen to thousands of cases, all involving
the same claims.
And lastly, the class action procedure also provides persons
and businesses who cannot otherwise afford legal representation
with access to qualified and experienced legal counsel who will
represent them and the class as a whole with regard to their
meritorious claims.
Who can become a class member in a class action lawsuit?
Every class action lawsuit defines a "class" of individuals
or entities on whose behalf the lawsuit is brought. The definition
of the class is set forth in the class action complaint, which
is the document that is filed with the court that initiates
the lawsuit against the opposing party. The court must then
determine whether the lawsuit meets the legal requirements of
a class action-that there are numerous claimants with common
questions of law and fact and that the class representative
will adequately represent the class with qualified and experienced
legal counsel. The court must approve the definition of the
class; this stage of the lawsuit is called "class certification."
Any person or entity that meets the definition approved by the
court is automatically a member of the class in the lawsuit,
but any class member is normally always given a chance to opt
out (decline to be considered a member of the class) if he or
she wants to pursue another remedy or no remedy. However, in
order to be eligible to receive any benefit, relief or monetary
recovery that a court may eventually order as a result of the
lawsuit, class members must not opt out and they must submit
a claim to the law firm that is representing the class or to
a claims administrator approved by the court.
What are the obligations of class members in a class action
lawsuit?
Class members are under no legal obligations other than to be
truthful in the submission of their claim forms. They are not
responsible for paying any fees or costs associated with the
lawsuit. Generally, class members are not called upon to assist
in any way with the litigation although they may voluntarily
offer information to the legal counsel representing the class
in order to help the class' claims. Class member may also normalIN,
"opt out" of the resolution of a class action lawsuit even after
the case has been settled or otherwise concluded. In the event
that class members do not like the proposed resolution or wish
not to be involved with the action, they may usually exclude
themselves from the class at the appropriate time set by the
court. One exception to this general rule is the case where
it is established by the court that there are limited funds
available to resolve the lawsuit. In this unfortunate situation,
the court will not allow any class members to opt out because
the court will not allow any further lawsuits against the broke
defendant. Still, no class member is ever forced to do anything
in a class action. A class member even in a nonopt out class
action can decide not to participate however, when they do opt
out, they must realize that they are precluded from further
pursuing any of their claims against the defendant(s).
How is a Class member informed of his or her rights?
If the court allows a case to proceed as a class action, the
court authorizes a notice to be sent to class members informing
them of their rights. The court will order the best and most
practicable method of notice, which is often an advertisement
in a newspaper, a first-class mailing or both. Recently, the
court has also approved and encouraged the use of internet websites
to serve as an additional means of dissemination of the notice
information. Accordingly, a class member may search the internet
to find out about class action resolutions and related information.
However, in order to insure that you receive notice, you may
register your claim with the plaintiffs' attorneys representing
the class, who will send registered class members individual
communications regarding the lawsuit.
Why and how does a Class member register a claim?
Class members who register their claim will be assured of receiving
notice directly from the lawyers representing the class if the
court grants class certification to the lawsuit. Also, all registered
class members can receive periodic status reports on the progress
of the case. Registration also helps the lawyers from the class
explain to the court why class certification is necessary (i.e.,
there are numerous claimants) and it provides a statistical
basis for trying to determine the total number of class members
and the amount of proceeds necessary to resolve the case. Finally,
registered class members will have advance knowledge of when
a case is resolved, and therefore they will be able to situate
themselves to take quicker advantage from the resolution.
Who pays for the lawyers?
In most class action lawsuits class members are represented
by attorneys who are paid on a contingency fee basis. This means
that the attorneys representing the class do not receive compensation
unless the lawsuit results in some significant benefit to the
class. In this regard, class action lawyers allow their compensation
to be approved and awarded by the court based on the common
good achieved for class members. If class counsel recover nothing
for the class, then they are not rewarded for their efforts.
If a recovery is obtained, application for payment of the legal
fees is made to the court and the court approves and awards
the amount to be paid. Class members and class representatives
do not pay for any legal fees associated with the case. This
is also true of the costs incurred in litigating the class action
case. All of the costs of the case are incurred by the counsel
representing the class and reimbursement of those costs are
sought from the court after a recovery has been made for the
class. Class members and class representatives do not pay for
these costs.
Class action litigation is very risky for lawyers because a
lot of work and expense must go into investigating a case and
trying to get it certified as a class action. Class certification
is complicated; therefore, only experienced and competent attorneys
should be retained by class members to bring their claims. Even
when a case is a strong one, there is considerable risk to the
lawyers and the class that it may not get certified as a class
action. When that happens, then each class member is forced
to hire and pay his or her own lawyers if they want to continue
with their claim.
© Copyright 2008 The Miller Law Firm. All rights Reserved.
If you experience problems or have questions, contact us at Info@ConstructionDefects.com.
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