Class Action or Individual Lawsuit: Which Is Better for You?
For most people with small losses, staying in the class is the practical choice. An individual lawsuit only makes sense when your losses are large and unusual.
For most people, staying in the class action is the better choice. If your loss is small or similar to everyone else's, a class action gives you a share of the recovery with no legal fees out of pocket and almost no effort. An individual lawsuit only tends to make sense when your losses are large, well documented and different from the rest of the class, and when you are willing to spend time and money pursuing them.
Why class actions exist
Many consumer harms are worth too little to justify a lawsuit on their own. Nobody hires a lawyer over a hidden fee of a few dollars. By pooling thousands or millions of these claims, a class action makes it economically possible to hold a company accountable. Class counsel are paid from the recovery, subject to court approval, so class members don't pay hourly fees.
The advantages of staying in the class
- ✓No cost to you: Class counsel's fees come out of the settlement, not your pocket.
- ✓Little effort: You usually file a short claim form, and some settlements pay automatically.
- ✓Court oversight: A judge must approve the settlement as fair, reasonable and adequate before it takes effect.
- ✓Strength in numbers: A large class gives plaintiffs leverage that one person rarely has.
The downsides of staying in the class
- ✓Small individual payouts: Money is split among many people, after fees and costs.
- ✓No control: You don't choose the lawyers or decide whether to settle.
- ✓You give up your claims: If you stay in and the settlement is approved, you are generally bound by its release, even if you never file a claim.
When an individual lawsuit can make sense
Opting out to sue on your own is worth considering in a few situations:
- 1Your damages are much larger than a typical class member's, for example a serious financial loss or injury.
- 2You have strong documentation of that loss.
- 3A lawyer has reviewed your situation and is willing to take the case.
- 4The settlement's payment formula clearly undervalues your situation.
Small claims court is another option for modest individual disputes. Dollar limits and procedures vary by state, so check your local court's rules. Keep in mind that many consumer contracts contain arbitration clauses that may require you to bring an individual claim in arbitration instead of court.
If you want to keep your right to sue separately, you usually must submit a written exclusion request by the opt-out deadline in the notice. Miss it, and you are bound by the settlement whether or not you claim. Talk to a lawyer before that date, not after.
The risks of going it alone
An individual case can take years and may end with nothing. You may have to pay costs, and if you hire a lawyer on contingency, a share of any recovery goes to them. The defendant has more resources to fight one person than a coordinated class. And once you opt out, you can't usually change your mind and take the class payout if your own case goes badly.
There is also the statute of limitations to consider. Filing a class action generally pauses the clock for class members while the case is pending, but the rules on when that pause ends are technical and vary. If you plan to sue separately, get legal advice quickly.
A simple way to decide
Compare what you would likely get from the settlement against what an individual case would realistically be worth after fees, time and risk. If your loss looks like everyone else's, stay in and file your claim. If your loss is unusual and significant, get a consultation before the opt-out deadline. Our guide to opting out of a class action walks through the mechanics.
Questions to ask a lawyer before opting out
- ✓How much is my individual claim realistically worth, after fees and costs?
- ✓Does my contract with the company require arbitration instead of court?
- ✓How long would an individual case take, and what would I need to provide?
- ✓What happens to my claim if I opt out and the individual case fails?
If you decide to stay in, the only job left is not missing the claim deadline. SettleScout tracks the settlements you qualify for and sends reminders before each one closes.
Frequently Asked Questions
Can I sue individually if I am part of a class action?
Usually only if you opt out by the deadline stated in the class notice. If you stay in the class and the settlement is approved, you generally release the claims covered by the settlement.
Will I get more money by suing on my own?
Sometimes, but not reliably. An individual case can recover more if your losses are large and well documented, but it costs more time and money and can end with nothing. For small, typical losses, the class settlement is usually the practical choice.
Can I opt out and then rejoin the class later?
Generally no. Once the opt-out deadline passes and the court approves the settlement, you can't usually switch back. Some notices allow you to revoke an exclusion before a set date, so check the official notice.
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