Class action lawsuits are used all across the country to help groups of people who have suffered a similar circumstance to get compensation and redress from companies who produce defective products, commit fraud or otherwise wrong them. When used correctly, class action lawsuits can reap great results for people and also keep companies from being dishonest. It is a simple “checks and balances” system that works in a capitalist society as well as it works in a democratic one.
Class action lawsuits were introduced as efficient methods to litigate against securities fraud and other stock fraud where individual complainants would not have the financial stake to seek redress on their own, but as a group could seek redress together with minimal outlay of cash. Today class action suits are filed in all manner of situations including toxic exposure like Asbestos, defective drugs like Vioxx or even to seek improved benefits from FEMA in the case of a class action lawsuit filed on behalf of victims of Hurricane Katrina.
The Bush administration is seeking to limit class action lawsuits, or at the very least to ensure that they are being handled in the appropriate venue and are incurring minimal costs of the government and the courts. Still, although there are some legitimate claims about the glut of class action suits, the idea behind them is sound since in many instances multiple people can be affected by the same defective drug, deceptive sales tactic or fraud in the same way – which is the main tenet behind class action law suits. In some instances, like in tobacco lawsuits, class action has been deemed inappropriate because there are so many differences between how victims of tobacco and cigarettes have been injured or negatively impacted.
Essentially a group of people come together with similar complaints against the same defendant. A class action attorney will then file a law suit on behalf of one claimant who is designated as the lead plaintiff. Once that is complete, the class action attorney or class action law firm will gather evidence and take depositions from all claimants. By presenting this evidence and showing that the claimants have similar injuries or losses, the judge presiding over the case will either grant or deny class status to the group of defendants. Typically, there is then a period of time where included claimants can remain a part of the lawsuit or “opt out” to seek their own action against the offending party. If the class action suit goes to trial and is successful, all of the compensatory award goes into a central “pot” or account and is divided according to court devised equations. Part of the “pot” is also designated for the class action attorneys, who are rarely if ever paid up front when they take on an action like this. The plaintiffs in a class action suit cannot seek any kind of individual settlement – and those who opt out are not entitled to any compensation secured through the class action lawsuit.
In many cases, class action law suits are settled out of court and the damages are undisclosed. Class action settlements can benefit the claimants and the defendants in a class action lawsuit because resolution is completed much faster and typically the defendant in a case like this can control press and public relations more effectively.