Class action lawsuits are typically those that can assert that a large number of individuals have endured harm from the actions of one firm, business or individual. In most cases, these are only taken against those that have significant assets, as there is no benefit is suing someone at this level that will never be able to pay the resulting settlement or judgment.
While it is not always the case, just about every class action lawsuit consists of at least 40 plaintiffs. The case will typically be with a few plaintiffs, who then ask the judge to be given class-action status. Once that has been approved they will then seek out others who have endured wrongdoing as well. By seeking out others that have faced similar situations they can reap much larger rewards for themselves as well as prove that injustices or harms have taken place due to the sheer number of individuals that report similar circumstances.
These types of lawsuits are used when the number of those affected would inundate courts with claims if they were handled separately. While this typically results in lower payouts for each that has been affected, it also means that everyone affected will likely get some level of compensation. As is the case with anything, there are pros and cons to filing this type of lawsuit.
Those that represent the lead plaintiff, or the person to originally file in court, often see astronomical rewards for their efforts. Instead of getting a portion of the proceeds from one individual claim, they instead get that same percentage from the bulk of claimants. This makes the world of class action lawsuits extremely profitable for those that are fortunate enough to identify the validity of such a claim first.
The lead plaintiff that brought the case to the courts first will also see a much higher payout than those that joined in after the case received class-action status. While some belief this to be unfair, the reality is that the lawsuit would not even exist if it wasn’t for their initiative. The cases typically also require the plaintiffs and their lawyers to advertise in such a manner in which those affected have the opportunity to join in once a judgment or settlement has been reached. The total settlement amount is then divided among all of those that claim the lawsuit.
These types of lawsuits exist as they are typically beneficial to every party involved. Average individuals do not have the means to pay for representation to fight in court against multimillion dollar companies, and most lawyers are not willing to take on such a case without a guarantee of compensation. They also benefit the business as while they may have to pay out a very large lump sum to those affected by their negligence; they only have to deal with one court case instead of hundreds or thousands. This often leads to a much lower payout on their end than what might be otherwise. There are victims in this scenario, however, as not everyone will learn that they need to make their claim in time, meaning they will not see compensation that they likely deserved.
Class action lawsuits are rather common. Lawyers understand that they can mean substantial rewards and are quick to take them on when it is clear that the defendants were negligent. This is especially true when the defendant benefited greatly financially. If you ever feel that you have faced harm from a company’s product, you should certainly seek the advice of a lawyer as you just might have such a case on your hands.