What Is a Class Action?
A class action lets a few people sue on behalf of a much larger group with the same complaint. Here is what that means for you as a potential claimant.
A class action is a single lawsuit in which one or a few people sue on behalf of a larger group, called the class, whose members were harmed in the same way by the same defendant. Instead of thousands of separate cases, the court decides or settles everyone's claims together.
Why it matters when you file a claim
Most people never take part in the lawsuit itself. You usually only hear about a class action when it settles and a notice arrives, or when you find it listed online. At that point, being a member of the class is what gives you the right to file a claim for a share of the money.
It also matters because a class action binds you even if you do nothing. If you fit the class definition and don't exclude yourself, the result applies to you, and you generally give up the right to bring your own lawsuit over the same issue.
A simple example
Imagine a company charges a hidden fee to millions of customers. Each customer lost only a few dollars, so no one would hire a lawyer alone. A handful of customers file a class action on behalf of everyone who paid the fee. If the case settles, the company pays into a fund, and every eligible customer can submit a claim for a portion of it.
How it relates to other terms
- ✓The class member is anyone who fits the group the case covers.
- ✓Class certification is the court's decision that the case can proceed as a class action at all.
- ✓In federal court, the rules come from Rule 23 of the Federal Rules of Civil Procedure; states have their own versions.
- ✓A class action differs from a mass tort, where each person's injuries are evaluated individually. See class action vs. mass tort.
Class actions also exist in Canada and the UK, though the procedures differ from the US system.
Want to know which class actions you are already part of? Tell SettleScout the brands and services you use, and it will match you to open settlements and remind you before each claim deadline.
Frequently Asked Questions
Do I have to sign up to be part of a class action?
Usually not. If you fit the class definition, you are generally included automatically. To get money, though, you often need to file a claim once the case settles.
Does it cost anything to be in a class action?
No. Class members don't pay lawyers out of pocket. Attorneys' fees are typically paid from the settlement fund with court approval.
Can I leave a class action?
In most damages class actions you can opt out by the exclusion deadline, which keeps your right to sue on your own but means you get no settlement payment.
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