The Pros and Cons of Class Action Lawsuits

If a company or organization’s negligent action causes you harm, you may feel powerless to hold them accountable as a consumer. After all, lawsuits are not cheap, and the process may be too daunting. However, there is an alternative: a class action lawsuit.

If other consumers suffered the same damages as you for the same reason, you could join a class action lawsuit against a business. This essentially means that together, you sue a defendant as one unit.

But, as with all other lawsuits, there are several pros and cons to consider with this legal avenue. The most important of which is that class action lawsuits can take years to be resolved.

Still, a class action lawsuit may be the best option if you strongly believe an organization must take responsibility for its actions.

Individual Lawsuit vs. Class Action

Knowing the difference between class action and individual lawsuits is crucial before filing or joining a lawsuit.

Firstly, it is important to note that the members of a class action lawsuit do not have the same ‘power’ as plaintiffs in an individual lawsuit.

When one person files a lawsuit against another party, he or she is called a plaintiff. The other party is called a defendant. Although there is usually only one plaintiff in an individual case, there can be more.

A class action lawsuit usually consists of many plaintiffs, referred to as the class. The class includes the initial complainants who filed the case. Only a few of these will typically be named in the lawsuit itself. The ones who are named are called class representatives or named plaintiffs.

Legal Process For a Class Action

A class action lawsuit can be filed in federal or state court and is governed by a special set of rules. Sometimes, these rules replace those that govern individual lawsuits.

A court approval requirement should start with class certification. This means whether your case qualifies as a class action lawsuit must be determined. The court may appoint a group of lawyers for the class action. Potential class members will also have the choice to join or opt out of the class action.

Class certification often proves to be the biggest initial challenge. For a federal court to certify a class, the court must decide that there are “too many potential members.” This would mean that individual suits for each member would be too difficult to process.

The court must also establish whether the class representatives can and will represent the entire class. It is important to note that these requirements do not apply in individual lawsuits. 

It is customary for plaintiffs to choose their lawyers in an individual suit. However, class action suits are always dependent on the legal counsel chosen by the court.

Also, when an individual plaintiff and defendant reach an agreement, the court does not have to approve it. However, a court must be informed and approve the settlement terms for a class action suit.

Pros of Filing a Class Action Lawsuit

Despite the legal hurdles and hoops, there are several benefits to filing a class action lawsuit. 

First, litigation costs are much lower because they are divided among class members. The more members, the lower the cost, which is a benefit in itself.

Also, the reduced litigation costs make it more viable for plaintiffs to sue for smaller compensation amounts. This is not always the best option in a traditional lawsuit.

Moreover, class action lawsuits are typically overseen by one judge. This means less court time and fewer delays. Because one judge also makes the ultimate decision, there is a far better chance that all class members will get a consistent settlement.

Class action lawsuits can also benefit defendants. They only pay the amount established by the judge, and this decision covers all class members.

There is also a far better chance that all class members will receive damages. This is as opposed to when a defendant faces several individual lawsuits that they may be unable to cover in terms of settlements.

Cons of Class Action Lawsuits

The biggest disadvantage for most class members is that they do not have individual control over any part of the legal process. The class representatives make all the decisions, including when to settle and how much to settle for.

Most class action cases are settled by financial compensation or refunds. In some cases, coupons are given for future services or products. If you want another type of compensation, doing so with a class action lawsuit will be difficult.

Furthermore, if the class representatives do not have a strong case, it hurts everyone in the class. If the class action lawsuit fails, it is likely that you and other class members will not be permitted to file individual lawsuits at another time.

Class action suits are often very complex and can take many years to resolve. If you are after a speedy resolution, a class action may not be your best option.

Alternative Options

If you do not want to tackle a class action lawsuit, you could look at filing an individual lawsuit. If you prefer to stay out of the courtroom, you could try alternative options

For instance, there is Alternative Dispute Resolution (ADR), which includes mediation, negotiation, and arbitration. This option is faster, more affordable, and usually less formal than a lawsuit. However, remember that ADR is not the best avenue for human rights disputes.

If you are also not interested in ADR, you could consider campaigning. A well-organized campaign can pressure a business into rethinking its operations and fixing the situation before it suffers reputational damage.

Such campaigns can even pressure local governments to regulate organizations better. Better yet, it gives communities a platform to air their frustrations and unpleasant experiences with a specific business.

Speaking To a Lawyer

Whichever solution you choose to hold a business accountable, it is best to consult with a lawyer first. Your lawyer will advise you on the best legal avenue to take and give you an idea of how strong your case is. 

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