Complete Guide on How to Start a Class Action Lawsuit
When a group of people has the same issues against the same defendant, usually a company that operates on a massive scale, they can come together and file under one lawsuit.
What Is a Class Action Lawsuit?
A class action lawsuit is a single lawsuit in which a large group or class of individuals who have all been harmed in the same way join together as plaintiffs.
A class action lawsuit seeks compensation for an entire group. You might hear this referred to as “mass tort litigation” or “multidistrict litigation.” No matter what it is called, a class action suit is most commonly used to file against negligent manufacturers whose products have caused injuries or against companies who have used fraudulent business practices to overcharge or cheat customers.
How Do Class Action Lawsuits Work?
Class action lawsuits combine multiple plaintiffs’ claims into one large court case so that only one judge has to review the facts and rule on evidence and motions only once. If a thousand lawsuits all alleged the same wrongdoing by the same defendant, and every plaintiff suffered similar injuries, then joining them into one lawsuit saves everyone time and money, including the court system. During a class action lawsuit, all people who were harmed let the lead plaintiff file the lawsuit on their behalf. The lead plaintiff works with a lawyer or a team of lawyers who handle litigation and represents everyone throughout the duration of the case.
When a large number of people share the same complaint, a lead plaintiff’s lawyer seeks the court’s permission to be “certified” as a class action on behalf of the whole group. The court requires that the group truly share a common cause of action, that the lead case is representative of the whole group, and that separate lawsuits could result in inconsistent rulings that present confusion about the proper standard of conduct expected of the defendant.
Main Reasons for Filing a Class Action Lawsuit
There are many reasons why you might want to know how to file a class action lawsuit. One of the primary reasons is that large corporations often cause injuries to a wide group of people in amounts that are not large enough to motivate each person to file a lawsuit. If your telephone service provider overcharged you every month by $1, would you sue? Would you find a lawyer to sue for you? No. But if millions of people were overcharged every month, then the stakes justify all the expense and effort to bring a class action lawsuit on behalf of the entire group of victims.
If an employer has discriminated against you because of your age, you might not be the only person against whom that company has discriminated. If you have grounds for an ageism lawsuit, and you know that other people across the large corporation have suffered similar issues, you might seek to file a class action lawsuit for everyone.
Illegal business practices are common reasons why people file lawsuits. Loan services, telecommunications companies, and other large service providers have sometimes been on the receiving end of a class action lawsuit when they illegally charge customers a service fee to process payment over the phone when that service fee was never agreed upon in writing or even disclosed to the customers.
False advertising and product liability
False advertising is another common reason for filing a class action lawsuit. Where companies, usually manufacturers, have made misleading statements about their products or where their product has caused some injury or negative consequence for consumers, class action lawsuits are an effective remedy for the people who were impacted.
Breach of contract
Breach of contract is another big reason for filing a class action lawsuit. If large companies don’t do what they promised, or what they have agreed to in writing, when multiple people have suffered from that same breach, they can come together under one lawsuit.
Benefits of a Class-Action Lawsuit
So what is the benefit of a class action lawsuit, and how do you decide when you suffered enough of an injury to participate?
- Helps to save money since costs are spread across many plaintiffs
- Provides a greater efficiency since one claim generally takes much less time than many similar claims
- Ensures more experienced legal representation
What to Know Before Filing a Lawsuit
Before you learn how to start a class action lawsuit against a company, you should know that not all situations are grounds for a class action lawsuit.
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For example: If you have a contract or user agreement with a service provider, like your cable company or your cell phone provider, the fine print might dictate that you are not allowed to join a class action lawsuit as a customer and are forced to use alternative legal methods like arbitration to resolve any dispute. This is why it’s important that you ask an attorney to look over any agreement you have with a company responsible for the issues. Consulting a qualified attorney can help individuals and employees, as well as consumers, understand their rights.
In order to submit a class action lawsuit, there needs to be more than one person who suffered the same injury. Class action lawsuits can be started by a small group of people, filed on behalf of all individuals who have suffered a similar injury or harm in a comparable way. Courts have held that 25 or more is a large enough group. Once a class action lawsuit is filed, a judge evaluates whether there are enough people who are injured in the same way and whether there is sufficient evidence of that injury to move the case forward.
Anyone can start a class action lawsuit but there are certain requirements that have to be met, which is why speaking with a qualified attorney can help you determine if you have grounds to file a class action lawsuit.
How to Start a Class Action Lawsuit
Filing a complaint
A class action lawsuit is started by filing a complaint. This is a legal document that an attorney drafts and submits after they have verified the facts of your case and any evidence you have. The complaint describes exactly what events caused financial loss or other injuries. It also names who is filing the lawsuit and any other individuals involved in that lawsuit, as well as what type of compensation you are demanding.
An experienced attorney will do their best to make sure that you meet all of the requirements for a class action lawsuit but it is up to the judge to make the final decision as to whether your case moves forward. The judge will determine if you’ve met requirements, such as the number of people who have been affected.
- Class action lawsuits are meant for large groups of people, at least dozens, hundreds, or thousands of people who have all suffered in the same way.
- Class action lawsuits must involve the same factual and legal issues and the same kind of injury suffered by every plaintiff involved.
- The person submitting the lawsuit, the main or lead plaintiff, must have injuries that cause them harm and are the exact same injuries suffered by everyone else involved in the lawsuit.
How Much Does It Cost to Start a Class Action Lawsuit?
You do not have to pay anything out of pocket to file a class action lawsuit. As the plaintiff, the person suing in court, your lawyers take on any financial risk. Lawyers typically take a percentage of the settlement as a fee that must be approved by the court. If there is no settlement, they don’t get paid, and you don’t get paid.
All the plaintiffs split the cost of the claim, which is usually deducted from the settlement at the end of the case. The class lawyers typically pay for all the costs and are reimbursed from the settlement funds.
How Long Does Class Action Lawsuit Take?
When you submit a claim to recover compensation for injuries in a class action lawsuit, litigation can take as little as a few months or up to several years. Class action lawsuits take an average of two or three years to be resolved, depending on how many people are involved in the case, the facts, the experience of your attorneys, and what you are demanding.
Getting Compensation with Class Action Lawsuits
Compensation from the defendant, or the company you are suing in a class action lawsuit, can be based on things like the terms and conditions of an employment contract or consumer agreement, any disclaimer from the company, and rules about accidents or risk for workers, insurance, or fraud.
A judge will determine the facts involved in your situation, and the judge or l jury will determine the outcome of the litigation and whether everyone in the class receives compensation.
Certification of Сlass Action Lawsuit
Depending on the state in which you live, a class gets certified after the court approves the initial complaint filed. The court has to certify the class and the fact that all requirements have been met before the class-action lawsuit can move forward.
This refers to the number of people. In most situations, states require a minimum of 40 plaintiffs or more. Every state is different, and some class action lawsuits have historically had hundreds or thousands of plaintiffs. But the court must certify that there is an adequate number of plaintiffs to join together under one lawsuit.
The plaintiff must have defenses or claims that represent everyone in the group. Typicality simply means that if a lawsuit is filed alleging that a business imposed illegal fees for processing payments over the phone without telling the customers, all the plaintiffs involved in the case must have had an account with that business and must have been charged those improper fees. The claim brought with a class action lawsuit has to be similar to the claims everyone else has suffered. If other people in the group are complaining that the business used false advertising, that wouldn’t be the same as the claim relating to the improper fees.
A judge will also determine whether or not the case is grounded in law. There have to be laws governing the behavior of the business and a rule against wrongdoing. In cases like false advertising, there are rules set up by the FCC that a judge would confirm are at issue.
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Overall, if you dealt with a defective product or you were scammed by a large company, you might have grounds to start a class action lawsuit. You should speak with an attorney who can review your situation. Attorneys can explain what rights you have and what steps you can take if you have legal grounds for a case. Remember that class action lawsuits have to meet certain criteria, and they can take many years before you get compensation.