Is a Class Action Lawsuit Legally Binding?

If you are interested in learning more about Canada class action lawsuits, you have come to the right place. One question we get asked frequently by our readers is whether a class action lawsuit is a legally binding contract for Class Members. The short answer is yes, if you qualify as a Class Member, a class action lawsuit can be a legally binding contract. However, there are steps that a Class Member can take if they do not wish to be bound by the Canada class action lawsuit.

What Is a Class Member?

A Class Member refers to an individual who is affected by a legal issue represented in a class action lawsuit. The definition of a Class Member will be defined in the complaint and must be approved by a judge. Typically, a class action lawsuit will include hundreds or thousands of Class Members.

Class Members are led by a representative plaintiff or a Class representative who files the class action lawsuit on their behalf. Class action lawsuits are an efficient way to litigate a legal issue that affects a large number of consumers. If a company sells a defective product that doesn’t work as advertised for $10, one consumer who purchases the product will have wasted $10 and may be able to ask the company that sold it for a refund or a replacement product. However, if thousands of people individually purchased the defective product, the company could be on the hook for far more money in damages if a court finds the company liable.

It is unlikely that each affected consumer will file an individual lawsuit against the company over a $10 product. A class action lawsuit is a mechanism by which a plaintiff can hold a company accountable for negligence or other wrongdoings on behalf of a large number of individuals who have been affected. These affected individuals are called Class Members and will be bound by the terms of the class action lawsuit if it is successful or if a settlement is reached, unless they opt out.

What Defines a Legally Binding Contract?

A legally binding contract is an agreement that is recognized under federal and provincial laws in Canada. If parties have entered into a legally binding contract, they must obey the contract terms and perform any duties set forth in the contract. If they fail to do so, they open themselves up to legal consequences and they may be required to pay damages.

Are Canada Class Actions Legally Binding?

Although a class action lawsuit is not a contract, its terms are binding once they are approved by a judge. The class action lawsuit or settlement may require a company to change its business practices, engage in a corrective advertising campaign, and/or discontinue misleading sales tactics. Class Members may be entitled to compensation or other benefits from the class action lawsuit.

Unless they opt out of the Canada class action, a Class Member will be prohibited from taking legal action against the defendant over the same issue that was resolved in the class action lawsuit.

Is It Possible to Opt Out?

Yes, it is possible for a Class Member to opt out of a Canada class action lawsuit. The process and timeline for opting out depends on the particular class action lawsuit. In many cases, a Class Member may not even know that they are part of a class action lawsuit until it is too late to opt out. However, lawyers and Class representatives are required to provide notification of the class action to as many Class Members as possible.

Notification may involve direct communication when available, or it may involve postings in magazines, newspapers and websites, such as Top Class Actions. This notification will include important information about the Canada class action, such as the reason for the litigation, the definition of the Class, and the legal issues at stake. The notification will also inform Class Members that a judgment in the case will be binding and prevent them from filing an individual Class Member lawsuit in the future unless they opt out.

The notification will explain the process of opting out to Class Members, including the deadline to do so. In some cases, particularly when the Canada class action involves injunctive relief and does not involve money damages, Class Members will not have the option to opt out.

If you are thinking of opting out of a class action lawsuit because you intend to file your own individual Class Member lawsuit, you should contact a lawyer to discuss your legal rights.

If your legal issue affects a large number of consumers, you may be eligible to file a class action lawsuit to hold the company accountable and seek compensation for all of those affected. Click here to submit your information and class action lawyers will review your case. If you have a case, you will be contacted for a free legal consultation.

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Canadian Class Action Rebates | 2020