A lawsuit known as a "class action" allows a group of people who have suffered a similar harm or loss to join together in one case. The rationale is simple -- allowing one lawsuit on similar claims is a time saver and money saver for our overburdened court systems.
Class actions make it possible for individual consumers with limited means to successfully challenge large businesses and corporations. For example, a consumer who is harmed by a defective building product can sue the manufacturer of the product on his or her behalf, and on behalf of the other consumers who were also harmed by the same product. Many well-known companies have been the subject of class action lawsuits, including General Motors, American Express, Taco Bell, Delta Airlines, and PayPal.
The most common issues addressed by class action lawsuits are:
- Dangerous consumer products
- Illegal debt collection practices
- Pharmaceutical liability
- Predatory lending practices
- Product liability
- Unauthorized disclosure of credit card information
- Unfair credit reporting
- Unpaid overtime
The persons who file the lawsuit on behalf of other class members are called the “class representatives.” They carry certain responsibilities toward all of the other class members. Once a claim is certified as a class action lawsuit, notice is given to all of the parties who have a similar claim so that they may be informed and provide input. This first notice gives people an opportunity to "opt out" and not be part of the class. People who opt out can file a lawsuit on their own behalf or can completely disregard the situation. In many instances, class actions are settled outside of court and presented to the judge for approval. If the case goes to trial, one judge may hear all of the claims at the same time and make one decision that applies to all of the parties.
