Should I Join the Class-Action Lawsuit?


It may have happened to you a few times over the years: You’ve received an email or mail notice inviting you to join a class-action lawsuit, or you’ve been informed that you’ve been automatically included. Has been taken. But being part of a lawsuit like this can be intimidating, especially if you need to make a choice, and it would mean surrendering the option of being sued in person.

In most cases, there is little downside to getting involved in these lawsuits, which combine multiple legal claims – often thousands – into a single claim against a single defendant, reducing fees for each claimant and potentially making the case much larger. earn payment.

And there have been many opportunities to do so. Following a series of large opioid settlements, 2022 marks the most billion-dollar class-action settlements in US history other than the tobacco settlements decades ago. a report From the National Law Firm Duane Morris. The stakes are high for class-action lawsuits at this stage, as they set the standard for corporate responsibility in areas such as data privacy, employee discrimination, securities fraud and civil rights.

But in cases where you’ve suffered significant damages, suing individually may secure a larger payout.

Why you should join (or opt out)

In many cases, class-action lawsuits provide such modest payments to each victim that participation is a matter of principle, not award. But even if you only get $10 to $20 in compensation, joining a class action lawsuit can help other customers or employees get justice, and deter the company from future harmful practices.

“It’s really a trial by proxy,” says Russell T. Abney, a lawyer who defends victims of dangerous drugs and defective medical devices at the law firm Watts Guerra. “The beauty of the class action,” he says, is that it aggregates individual cases into a number that is high enough to go against a large company.

In most cases, Abney says, plaintiffs in class-action lawsuits pay legal fees on a contingency, meaning they don’t pay anything until they win the case. The attorneys taking on these lawsuits will typically receive payment as a percentage of the settlement obtained from the company.

If you are part of a lawsuit’s “class”—that is, if you were affected by a particular event or purchase described—you will often automatically be included in the lawsuit. And for some cases, such as those related to pay violations or defective products, you may have to opt in.

Class representatives don’t always get paid big

If you feel strongly about the outcome of a class-action lawsuit, you can also participate as a class representative, sometimes called a lead plaintiff. In some cases, becoming a class representative can pay off big – but not always.

Even though the class representative is the headline of the case, “that person doesn’t necessarily get any kind of benefit,” says Jennifer A. Riley, partner at Duane Morris and vice chair of the firm’s Workplace Class-Action Group. She notes that some courts in some jurisdictions will be able to award service awards to the plaintiff representing the case, often between $2,500 and $7,500, but other courts have found these awards to be unreasonable. And it is difficult to ascertain whether such a service award would be awarded.

Class-action lawsuits can take anywhere from a few months to several years, which can be an excessive commitment for many people. For example, the Exxon Valdez oil spill took 17 years to reach a class-action settlement.

When to Opt Out (or Don’t Join)

If you plan to make your own case, opting out or not participating in a class-action lawsuit makes sense.

“If you have your own lawsuit, the value of your claim could be much, much more than that of an individual as a class member,” said Gerald L., a partner at Duane Morris. Mattman Jr. and the president say. Law firm’s workplace class-action group. “You’re trying to decide, ‘If I opt out, am I going to do much better than the class action?’ And in certain circumstances, one person will do better. They’ll get the money quicker, and they’ll get more money.

An example: following a credit-scoring company Equifax’s data breach In 2017, which compromised the personal data of 147 million people, The New York Times reported That some people took Equifax to small claims court, winning much larger sums than those who received class-action payouts.

Small claims courts – which handle claims ranging from a few thousand dollars to over $15,000 depending on your state – typically charge a small fee to file, making them a relatively low-cost way to seek damages. The way is found. Typically, plaintiffs represent themselves in these cases, sparing expensive attorney fees.

If you are considering a major lawsuit, however, the expenses are much higher. Consulting with an attorney can help you determine whether you have a strong case and how it might unfold.

This article was written by NerdWallet and originally published by The Associated Press.

Claire Tsosi, an assigning editor at NerdWallet, contributed reporting to this article.

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The views and opinions expressed here are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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