A Step-by-Step Guide to the Class Action Process
Understand how a class action lawsuit works, from initial assessment to final judgment. This guide reveals what happens behind the scenes.
Assessing a Possible Class Action
It starts with you. If you feel a business practice is unfair or illegal and affects many people similarly, it may be worth investigating. Trust your gut; if something seems wrong, it often is. The first step is to see if the company is breaking the law in a systematic way.
Hiring the Right Class Action Attorney
Find a lawyer with significant class action experience, specifically in the area of your claim (e.g., consumer, securities). A good attorney will guide you, explain their strategy, and work with you as a class representative to protect the interests of all class members.
Filing the Class Action Case
Your attorney will investigate your claim and file a "complaint" in the appropriate court. This legal document outlines the facts and explains why the defendant broke the law, identifying the case as a class action.
Insights into the Defendant’s Strategies
Defendants will challenge the lawsuit. They may file a "motion to dismiss" to throw the case out early or argue that the case shouldn’t be a class action. This stage involves legal arguments between the lawyers.
Certifying the Class Action and Sending Out Notice
If the court agrees the case is suitable for a class action, it "certifies" the class. A notice is then sent to all potential class members explaining the case and their right to participate, opt-out, or object.
Establishing a Valid Class Action Claim
Both sides gather evidence through a process called "discovery" (interrogatories, depositions, document requests). Most cases settle before trial, as both parties have a clear idea of the strengths and weaknesses of their positions.
Approving Class Action Settlements: Fairness Hearings
If a settlement is reached, the court must approve it to ensure it is fair to all class members. This involves preliminary and final "fairness hearings" where class members can voice their opinions.
Paying the Class Action Attorneys
Attorneys are typically paid on a contingency basis. If the case is successful, their fees are approved by the court and paid from the settlement fund or by the defendant. This is often a percentage of the total recovery.
Compensating the Class Action Representatives
As a reward for their time and effort, class representatives often receive an "incentive award" from the court, separate from the compensation received by other class members. This amount varies based on their involvement and the case outcome.