What Are the Benefits of a Class Action Lawsuit?

by Madison A. Gregg and Cameron McDonough

A class action is a specific type of civil lawsuit introduced on behalf of multiple similarly situated people that have been impacted by a defendant in the same manner.  What differentiates class action claims from individual claims and multi-plaintiff lawsuits is that instead of each plaintiff being named in the complaint and participating directly in the case, only class representatives are named and act on behalf of the entire class. There prove to be many benefits of a class action lawsuit, with the main upside being the vindication of rights even when individual claims may be too small for any one class member to pursue on their own.

Who Qualifies to Join a Class Action and How are Classes Certified?

Those who qualify for a class action must have a lawsuit that satisfies the requirements established by Federal Rule of Civil Procedure 23 (“Rule 23”). Rule 23 is the mechanism by which courts “certify” a class (that is, grant the class representatives permission to proceed on behalf of a class).

As described in Rule 23(a), a proposed class must meet four prerequisites: numerosity, commonality, typicality, and adequacy of representation.

• Numerosity requires the class filing the lawsuit to be large enough that it is inefficient or impracticable for every class member to pursue individual claims or to consolidate every class member’s lawsuit.

• Commonality requires that all class members have experienced that same injury or incident and share a “common question” that is essential or central to the claims being filed.

• Typicality requires the class representative’s legal theory and claims to be “typical” of the entire class, meaning that proving the class representative’s theory would prove the same for the class.

• Adequacy of Representation requires that there be no conflicts of interest between the class representative and the class itself.

The class action must also fit into at least one of the categories of class actions that are legally permitted. According to Rule 23(b):

• A class action is permitted if separate claims result in inconsistent rulings that conflict with one another and set different rules for the defendant.

• A class action is permitted if separate claims may also affect other people that are not in the lawsuit.

• A class action is permitted if the problem that the class faces is the same for everyone and the best solution is to provide one ruling that applies to all.

• A class action is permitted if the court finds that it is more fitting than other methods of litigation, such as individual claims.

What Are the Benefits of a Class Action?

There are many benefits to a class action lawsuit, with one being the increased efficiency of litigation. When a multitude of people are injured by the same defendant(s), a group lawsuit decreases both the time and the expenses associated with numerous individual filings.

A class action lawsuit eases the costs of litigation by dispersing the expenses across a larger number of parties and by grouping together claims to generate larger sums. These larger sums can increase the likelihood that a lawyer will accept a case. Hence, another advantage of class actions is that injured parties who might not otherwise be able to secure representation or pursue their claims due to the cost and expense are able to receive compensation.

This also means that defendants who typically evade punishment for their actions may be deterred by class actions and the legal power they give to the “little guy.” The threat of litigation discourages corporate wrongdoing and inspires future policy changes to enhance corporate accountability.

Finally, another benefit of class actions is that they are more likely to come to a finalized resolution and consistent adjudication by possibly binding every member of the action to the judgement.

What Does Recovery Look Like?

Class actions that proceed to trial are resolved similarly to other civil cases. Depending on the case, a judge or jury will first decide if a defendant is liable and then decide the award (or “judgment”).  However, many class actions are resolved through settlements or other forms of compromise, which must be approved by the court.

When judging settlement agreements reached between parties in a class action, the court asks whether the terms of the settlement are “fair, reasonable, and adequate,” pursuant to Rule 23(e). Once the court is satisfied that the entire class has been notified and given the opportunity to be heard, and that the agreement is fair, reasonable, and adequate, the settlement can be approved.

In a class action, recovery can take various forms, often including an award of damages (or monetary compensation) and/or injunctive relief (wherein the defendant agrees to take or cease specific actions). The specific facts and circumstances of a class action will determine the amounts and forms of recovery are available for the settlement agreement or judgment.

When to Speak to a Class Action Attorney and How Can Miller Shah Help?

If you believe that you are a part of a large group of people that have been similarly impacted and share the same claims, then consider the various benefits of a class action lawsuit.

Miller Shah LLP has helped many clients through major class actions involving price-fixing, wage violations, or deceptive products. The firm has done this through uncovering long cons, fraudulent business practices, and improper reporting. Some of the main Miller Shah class actions include antitrust cases, consumer protection suits, employment discrimination and civil rights, employee benefits issues, ERISA/fiduciary compliance, housing practices, insurance coverage cases, securities fraud/breach of fiduciary duty litigation, wage and house class actions, and opt-out litigation or arbitration.