What is a class action?

Leaving aside the legalese and lawyer mumbo-jumbo, a class action is a way for a person who was ripped off, injured, or otherwise wronged by a big company to get a lawyer on his or her side to stand up to that company and get justice without having to pay a lawyer’s fees or expenses.

We have all experienced the frustration of getting ripped off by a big company. We complain until we’re blue in the face but the company simply doesn’t care and won’t stand behind its product or provide fair treatment. We can’t afford to hire a lawyer to fight the company, so we end up dropping it.

A class action is a way that a single person can stand up for him or herself, and all others similarly harmed, with the help of an experienced lawyer, and bring that company to court to answer for its actions.

In class action settlements, don’t the lawyers get millions of dollars while everybody in the class just gets a coupon or a check for a couple dollars?

Class actions have a bad reputation among a lot of people, and this is one of the most common complaints. In fact, there are some bad class action settlements that don’t give enough to the members of the class and give too much to the lawyers. The class action rules are designed to prevent this by requiring a judge to approve all class action settlements, including the amount of the money that goes to the lawyers, but some bad deals still slip by and get approved. Experienced ethical class action attorneys fight for the class, not themselves.

Also, some class action settlements that look bad on the surface, are actually pretty fair when you dig in to the details. For example, in a regular case, lawyers often get a 40% fee. In a class action case, the judge usually awards a lower fee to the lawyer, often in the range of 20-30%. Accordingly, the class action lawyers are getting a lower percentage than they would get in a regular case (and much less than the amount going to the class). Obviously, when there are a large number of class members, each individual’s share of the class recovery will be smaller than the attorneys’ fee, but the proper comparison is to compare the amount going to the class as a whole versus the amount going to the lawyers.

In class action settlements, why don’t class members get 100 percent of their damages?

Class action settlements rarely provide class members with 100% of their losses because these settlements are the result of a compromise negotiated by lawyers for the class and the lawyers representing the company being sued. Why do class action lawyers agree to settlements that provide less than 100% of class members’ damages? Mostly, because we realize that class actions, even good ones, often lose. Good class actions can die for many reasons. Judges often “deny class certification” meaning that they think there are too many differences between class members to allow the case to go forward as a class. Judges also often dismiss cases based on unfair provisions in statutes or contracts that favor companies and hurt consumers. These rulings can kill a case, even though individual class members may have valid claims.   Experienced skilled class action lawyers must weigh all the risks (plus the long delays involved with fighting a case until the end), when deciding whether to accept a settlement or continue fighting. As a class representative, you will be included in the discussions and decision making.

What makes a good class action?

The key to a good class action is a case where “common issues predominate over individual issues.” In other words the complaint needs to involve a common situation where a large number of people were harmed in the same way by a company with enough money to make a substantial payment to the class.

Should I be a class representative? What’s involved? What’s in it for me?

In a class action, the lawyers do most of the work, but serving as a class representative does require some work. While all cases are different, typically the class representative has to gather up any documents he has that are relevant to the case and answer some basic questions about the facts of the case. Sometimes the class representative must give a deposition, meaning answer questions about the case under oath. If the case proceeds to settlement talks, the class representative will have the opportunity to provide input.

When a class action case settles, the class representative is entitled to recover in the same manner as the other class members. Additionally, the court generally awards the class representative an additional amount (referred to as a service award or incentive payment) to compensate him or her for the standing up for the class.

Most class representatives find the most rewarding part of the experience is being able to stand up to a large company and make it come to the table and pay to reimburse the victims of its wrongdoing.

How can I find out if I have a good class action?

Send us an email at cory@coryfeinlaw.com, or call with information about your potential case. We will maintain the confidentiality of your email and respond promptly. There is no cost to you for this consultation. If we take your case, we will take it on a “contingent” basis, meaning you will not have to pay us anything and our recovery, if any, will come only from the proceeds of the case.

Disclaimer

The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Use of and access to this web site does not create an attorney-client relationship between a lawyer and the user or browser.