A case qualifies as a class action when there are multiple individuals or entities who have suffered a common injury. At least one plaintiff is designated as the “class representative” and the lawsuit is filed. The class must then be certified. Certification requires documentation that the class is too large to make individual suits practical, that there are legal or factual claims in common, and that the claims or defenses are similar. Generally, it must be shown that a class action is superior to individual litigation for resolving the disputes.

Once the class is certified, notice is served on all parties who have a similar claim. These parties are allowed to “opt out” of the class, and those who do have no further standing in the case. Technically, joining a class action lawsuit is a passive activity – members participate by not "opting-out." In the rare instance that a suit is filed as an "opt-in" class action, filling out a claim form may be necessary.

Individuals who do not opt-out of a case are usually bound by the outcome and prohibited from taking any further action on the matter. An individual who wants to participate in the suit as a named party may hire his or her own lawyer and seek to intervene in the lawsuit. Individuals that opt-out can either file a lawsuit on their own behalf or ignore the legal situation altogether. A class action lawsuit may take years to resolve. Most class actions are settled outside of court with a judge giving final approval on the fairness of the settlement. Of course, the case may be tried and a decision rendered in court.

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