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Do Class Action Lawsuits Really Work?

Usually, when we want to understand if a certain thing or a phenomenon works or not, we need to first understand what it is. So when Newton wanted to understand how gravity worked, he first needed to understand what it was. And when the apple fell on his head he then understood how it worked. But that is not all. He then discovered that every mass attracts every other mass in the universe. The gravitational force between two bodies is proportional to the product of their masses and inversely proportional to the square of the distance between them. And this was too much about Newton. Now, what are class action lawsuits?

A class action is a legal proceeding. It involves a large number of people who have a claim against the same entity or a person. Usually, people merge their claims into one in order to have the matter dealt with more quickly and cost-effectively.

A class action lawsuit is a civil lawsuit. It can be brought in federal or state courts. However, the Class Action Fairness Act of 2005 makes it easier for defendants to move class action lawsuits from state to federal courts. Class action suits are frequently used for claims of injury, for example, injuries from hazardous products. Those can be pharmaceutical products and dangerous drugs. Interestingly, successful class action cases have involved tobacco, asbestos, Agent Orange, breast implants and a contraceptive device. And successful cases are not only physical injury cases. Class actions are also used in security cases. For example, fraudulent financial statements and practices like revealing false information about stocks can be under this category. Employment cases are also hot for class actions.

Opt-out and opt-in class action

You should know that there are two kinds of class actions: opt-out and opt-in. Let’s start with opt-out class action. It is one where, even though the people within the specific class are not actually parties to the litigation, still form part of the class unless they “opt-out.” And opting-out means no longer wishing to be involved or affected by the outcomes of the case. And the outcome can be a settlement or a judgment. And in an opt-in class action the members of the group consent to the proceedings on their behalf.

Funded and unfunded class actions

It is as it is: some class actions are funded and some are not. But what is important is to understand the difference between them. When one or more persons pay for all or part of the legal and non-legal expenses it is a funded class action. And alternatively, an unfunded class action is where the members and the lawyers agree to a “no win no fee” agreement. This means that the members will not pay for the legal expenses unless the lawyers win the case.

Disadvantages?

As everything good, class action lawsuits also have some disadvantages. And in some cases, a class action may not be the most appropriate cause of action. It can be for a number of reasons.

First, the lawyers working on the issue might not be able to service each member’s individual and unique needs. Second, by joining a class action, the class members might be disqualifying themselves from being able to bring their own individual actions on a later occasion. Third, if the class action does reach a settlement or judgment, it is probable that the amount each member will receive will be lower than what you could be awarded if you were to personally pursue the matter. And this is a serious issue to think about. Fourth, you will have much less control over the proceedings in a class action than you would in your own personal matter. And lastly, there is a chance that conflicts between party members will arise in a class action as to how the matter is run.

Did you know?

Did you know, that AT&T paid a $45 million settlement in response to consumer complaints that they had received unsolicited automated cell-phone calls? Automakers Hyundai and Kia have agreed to pay $395 million following allegations that they inflated fuel-economy data. Cases involving consumer privacy, such as the 2013 Target data breach, have become even more common.

But don’t expect a windfall, because according to NERA Economic Consulting, settlements in recent years have averaged $56.5 million. But individual class members rarely see a fat payday. For example, the proposed Target settlement is $10 million (separate lawyers’ fees total $6.75 million). If all 40 million people who had a debit or credit card compromised file a claim, each one could receive just 25 cents, assuming none of them can document their financial losses. However, Hyundai owners will receive an average of $353, and Kia owners will receive an average of $667.

To be fully answering the question “do class action lawsuits really work” I have to say that they do sometimes. It really depends on the case. And it also really depends on the lawyers that are working with you. You always have better chances of winning when you have a better lawyer. Margarian Law Firm’s class action lawyers are the best of the best.

 

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