What is a Class Action Settlement and What to expect?

I’m sure, that while searching the web to get an overall idea about class action lawsuit and its related cases, you could hardly find any short and precise article. Congratulations, you have finally found one that does just that! This article is your key to understand the essence of a class action settlement and beyond.
First, let’s define what a class action settlement itself is. According to a Business Dictionary ”Resolution of a class action suit brought against a person or entity. Class action settlements usually benefit the large group that initiated the suit. Often times, the settlement will involve some type of monetary payout to plaintiffs, but the actual amount received may be minimal depending on the number of people included.”

Class action settlement process

As you know, class action lawsuits differ from simple lawsuits with the number of plaintiffs involved. For example, a group of people may suffer because of a certain type of a product and a subgroup of them might decide to file a class action lawsuit against the product manufacturer. In doing so this subgroup, which may consist of merely one or two class members, triggers a lawsuit which is on behalf of and for the benefit of the entire class of people who are harmed by the product. Eventually, if the class action lawsuit is successful, the entire class of people who used/purchased the product receive a class action settlement or resolution in their favor and they get a notification about the settlement details.
IT tools of the 21st century have made life easier even in the legal field. After class action settlement, a website is launched to help the class members to easily fill out the claim forms in order to receive their part of the settlement proceeds. It may happen that the compensation fund is left unclaimed by the deadline. In such cases, the remaining money may be distributed among other class members or given back to the defendant or more likely apportioned to charities.

Class action lawsuit example

This example is about a class action lawsuit against ”Aloe Magic” shampoo manufacturer. Based on the ad, the shampoo contained 20% aloe vera when the amount was only 5%. Consequently, a class action was filed against the manufacturer for a false advertising campaign. The number of plaintiffs was nearly 8,000 from around the USA. Two class members, Mary and John Peters became plaintiffs representing all others at the court action.
As a result of the lawsuit, after several years of fight, the plaintiffs won the case. In accordance with the verdict, the defendant Magic Manufacturing Company had to refund the price of each shampoo bottle ($10) to every single plaintiff. The court also ordered punitive damages against the defendant in the amount of $500 per plaintiff. So, can you imagine the total amount of compensation for 8,000 plaintiffs? A whopping $4,080,000. However, realize that fact that each consumer still ended up with merely $510, which was the fair amount of their loss plus their share of the punitive damages.

Why is it better to settle the case?

Actually, a trial is a long, exhausting and expensive process. Searching for a settlement of the case may make the things easier. Class action settlement may help you avoid the expenses, instead awarding some compensation. This may also be beneficial for the defendant. He/she may avoid the risks of punitive damages as a result of the court verdict.
Although all laws and regulations in the US differ from state to state, according to the Federal Rules of Civil Procedure, there are certain common criteria to meet to file a class action in any state. Specifically, Rules 23(a) and (b) state the requirements for class certification. So, here are four main requirements to meet:
”The class is so numerous that joinder of class members is impracticable (numerosity); (2) there are questions of law or fact common to the class (commonality); (3) the claims or defenses of the class representatives are typical of those of the class (typicality); and (4) the class representatives will fairly and adequately protect the interests of the class (adequacy).”

In addition to Rule 23(a) and (b), the court requires:
”that a definable class exists, (2) the named representatives are members of that class, and (3) the claim of the class is live, rather than moot.”
Do you think that you may have been a victim of a product manufacturer? Don’t let the ambiguity prevail over your thoughts. Find your class action attorney within our experienced team of attorneys. He/she will answer all your questions without exceptions. Another beauty of class action litigation is that not only is one able to stand up for an entire group of people but one is likely to be compensated by the Court with what is called an enhancement award for being the one who filed the lawsuit.


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