subject: Class Action Lawsuits: How They Work And Why They Happen [print this page] At some point in your life, you may have received a letter or notice in the mail asking you to participate in a class action lawsuit. Although you may have thrown it away, or read through only to discover the only action required of you was, well, non-action, you should know what exactly a class action lawsuit is.
By definition, a class action lawsuit is a lawsuit brought on behalf of many people who have been harmed in some manner. For example, a class action lawsuit may be filed by people who purchased a toy that was later recalled by the manufacturer for being a choking hazard to babies. Another type of class action is a securities class action, which represents a group of people who purchased or acquired the stock of a publicly traded company during a specific period of time (typically a period of artificial market inflation). Class action lawsuits can help people who have been hurt by a manufacturer or financial institution, but the damages done to one person is sometimes not enough to justify hiring a lawyer. But as a group of people with a common cause, there is sufficient support to hire a lawyer.
Who files a class action lawsuit? It only takes one person who was harmed to hire a lawyer and to speak up. This person becomes the Lead Plaintiff and serves as the representative of the people involved in the class action lawsuit. As Lead Plaintiff, that person is required to provide testimony at the court hearings.
As the name suggests, a class action lawsuit could involve up to hundreds, if not thousands, of people. There is no specified number, but there should be enough to convince a judge they need not listen to each and every individual case. In most cases, individual names are not mentioned but all are referred to collectively. In fact, you often do not need to do anything other than fill out an Internet form or send in a mailing to be involved.
Do you need a lawyer? Honestly, most class action lawsuits cover such a large group of people that individual damages turn out to be very small. The cost of hiring a lawyer would be so much greater than the settlement per person that it is not worth it. Compensation is typically small, and sometimes you may receive a coupon or a gift certificate. Or you may receive some cash. Talk to a lawyer if you feel you have been greatly affected and deserve serious compensation.
