Class action lawsuits are used when a group of people (a class) have similar legal claims against a defendant. For instance, a group of people affected by false advertising claims about a product would be entitled to participate in a class. Class actions are filed by one or a few plaintiffs representing the entire class, and then once the case is settled, the entire class shares the compensation, if there is any.
Most classes involve hundreds or thousands of people. Rarely, if ever, do each of these individuals have their own legal representation. In most cases, individual claims are too small to warrant a lawsuit, but when added together, the claim for the entire class can be for millions of dollars. Class action lawsuits are cost-effective and efficient, and help to prevent overcrowding in the court system.
The benefit of joining a class action lawsuit is the power it gives you to receive compensation. Alone, a small claim is unlikely to be heard. However, as a member of class, you have the power of attorneys, their resources, and numerous plaintiffs working in your favor – this gives everyone affected by wrongdoing a chance to have his or her "day in court.”
The disadvantage to joining a class is that you are required to give up your individual right to file a lawsuit and you must agree to be bound by the result of the class action lawsuit. However, in most cases in which class action is possible, your best chance of receiving compensation is to join the class.
Paying attorneys’ fees is a reasonable concern, as many people are unable to afford expensive legal representation. However, one of the primary benefits of participating in a class is that you are not required to pay a lawyer out of your pocket. In most class action lawsuits, legal representatives are paid a percentage of the money they recover in the lawsuit, which varies from about 25 to 35 percent of the award. It’s in the legal team’s best interest to build a strong case and fight for as much compensation as possible for the members of the class.
There are also instances in which class action lawyers calculate their fees based on the time invested in the case and they take that amount from the recovery fund. And in some rare instances, the defendant is responsible for paying the fees for the class action lawyer.
The important thing to remember if you are thinking of joining a class, or you believe you could launch legal action that could result in a class action lawsuit, is that you will not be paying the class action lawyer out of your pocket. Members of a class can only gain from their participation, though the amount they gain might be small once the attorney fees and entire class is compensated.
If you would like to know more about how class action lawsuits work, or you have questions about a legal situation you believe might qualify for a class action, contact the Holmes Law Group.
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