How Do Class Action Settlements Work?

Class action lawsuits are a way for a group of people or organizations who have all been harmed in a similar way by one or more companies or individuals to seek justice, as well as damages for any injuries they have suffered.

When a company’s actions cause just a small amount of damage to thousands of people, a class action lawsuit can hold them responsible for the entire amount of damage they caused to all of the individuals.

If a company falsely advertises a good so that it is worth a few dollars less than advertised, a single consumer may not even realize they have been harmed and would not likely file a lawsuit over a few dollars. As a result, without the ability to file a class action lawsuit, the company could reap millions from their unethical or illegal behavior if they sell many falsely marketed units.

When consumers band together in a class action lawsuit against the company, they can hold the company responsible for all of the damages they have caused to all consumers, acting as a deterrent against bad behavior by companies, such as false advertising.

Class action settlements are one way for this type of lawsuit to be resolved. Class action lawsuits take a long time and are often expensive to litigate. Often the defendants, as well as the plaintiffs, want to settle the class action to avoid the uncertainty and expense of future litigation.

Who is Involved?

Class action lawsuits involve a lead plaintiff or plaintiffs who act as representatives for all of those allegedly harmed by the defendant or defendants, called the Class.

The plaintiff must appropriately represent Class Members. This means that they must have suffered the same or a similar type of harm as those they propose to represent. In addition, they must have been in a similar situation as other consumers or Class Members who they allege suffered harm.

In addition, most plaintiffs bring their cases using class action lawyers. Class action lawsuits are generally complex. The litigation involves many rules and regulations that must be followed, as well as potentially dense legal arguments as to why the defendant or defendants are liable for the harm claimed on behalf of Class Members.

Further, class action lawsuits are usually filed against large, well-funded companies that hire top lawyers to fight the allegations. A team of experienced class action lawyers help plaintiffs and the proposed Class Members fight defense tactics on behalf of these companies.

The other players in a class action lawsuit are Class Members. These are individuals or entities that the lead plaintiffs propose to represent. Being a Class Member is an important designation because the decisions made in a class action lawsuit will be binding on these individuals unless they opt out of the litigation. Class Members also benefit from any settlement agreement reached in the lawsuit. Or, if they exclude themselves, they can pursue their own legal action against the defendants.

What is the Process for a Class Action?

Generally, class action lawsuits are initiated by the lead plaintiffs on behalf of their proposed Class Members who include other individuals who have allegedly been harmed. However, law firms and community legal clinics may recruit plaintiffs for class action lawsuits that they believe are important and that they will win.

It is important to consider an experienced class action lawsuit lawyer to help because certain requirements must be met to convince a Canadian court to “certify” a proposed class action lawsuit.  A judge will hear arguments from the plaintiffs’ lawyers about why plaintiffs appropriately represent the interests and experiences of the typical Class Member they proposed to represent. The certification process can take several years, if not longer.

If the judge determines that a class action lawsuit meets these requirements and can be certified, Class Members are automatically entered into the class action lawsuit in Canada unless they take action to “opt out” or exclude themselves from the litigation. Each class action lawsuit that is certified in Canada will have different instructions for Class Members to exclude themselves.

Though Class Members do not have to do anything to enter themselves into the class action, experts recommend they provide their contact details and information about their claim to the class action lawyers handling the case. The lawyers will then be able to send them important notifications about their rights.

Class action lawsuits must also go through all of the other steps of litigation that apply to other types of lawsuits, before and after certification including investigation, pleadings, discovery, pretrial motions, and trial, as well as negotiations for settlement.

The outcome of a class action lawsuit can be a verdict rendered by a judge or the parties can agree to a class action settlement.

Settlement Notices

In class action settlements in Canada, settlement notices are important. These notices provide information to Class Members about their rights, as well as the opportunity to opt out of the settlement and pursue their own litigation against the defendants.

The settlement notice will provide the following pieces of information:

• The underlying facts of the case
• A description of the Class
• The benefits under the settlement agreement
• Steps Class Members have to take to obtain the benefits under the class action settlement

Get Started on a Class Action

When a potential plaintiff contacts a class action lawyer, the lawyer will gather information to determine whether a class action lawsuit can be filed. Frivolous lawsuits will be dismissed, so class action lawyers need to know several factors before proceeding, including;

• The number of people injured
• If a class action has already been filed
• If any deadlines to file a class action lawsuit have passed
• If the potential plaintiff appropriately represents the Class Members

The first step in initiating a class action lawsuit that may be resolved by a settlement agreement is to contact an experienced class action lawyer.

Top Class Actions is committed to educating consumers about all available class action settlement money so that they can claim what they are entitled to claim. Make sure you don’t miss out on any free money to which you’re entitled and sign up for our free newsletter. We’ll let you know about the latest class action settlements and any filing deadlines that are approaching. You can also check out our Open Settlements section to find out which settlements are currently accepting claims.

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