Class-action lawsuit

A class-action lawsuit is a type of legal proceeding in which one or several persons sue on behalf of a larger group of people, known as "the class." This legal mechanism is designed to address situations where many individuals have suffered similar harm or have a common interest in a matter, making it more efficient to resolve their claims collectively rather than individually.

Overview

A class-action lawsuit allows individuals to pool their resources and claims into a single lawsuit, which can be more efficient and cost-effective than pursuing separate legal actions. This type of lawsuit is particularly useful in cases where the damages suffered by each individual are relatively small, making it impractical for them to pursue legal action on their own.

History

The concept of class-action lawsuits originated in the United States and has since been adopted in various forms in other jurisdictions. The modern class-action lawsuit was formalized in the United States with the adoption of Rule 23 of the Federal Rules of Civil Procedure in 1966, which established the framework for class-action litigation.

Legal Framework

In the United States, class-action lawsuits are governed by Rule 23 of the Federal Rules of Civil Procedure. To proceed as a class action, the lawsuit must meet several requirements:

• Numerosity: The class must be so large that individual lawsuits would be impractical.
• Commonality: There must be questions of law or fact common to the class.
• Typicality: The claims or defenses of the representative parties must be typical of those of the class.
• Adequacy: The representative parties must fairly and adequately protect the interests of the class.

Once these criteria are met, the court may certify the lawsuit as a class action, allowing it to proceed on behalf of all class members.

Types of Class Actions

Class-action lawsuits can be categorized into several types, including:

• Consumer Class Actions: These involve claims by consumers against companies for issues such as defective products, false advertising, or unfair business practices.
• Employment Class Actions: These involve claims by employees against employers for issues such as discrimination, wage and hour violations, or wrongful termination.
• Securities Class Actions: These involve claims by investors against companies for securities fraud or other violations of securities laws.

Advantages and Disadvantages

Class-action lawsuits offer several advantages, including the ability to aggregate many small claims into a single, more powerful lawsuit, and the potential for more efficient resolution of claims. However, they also have disadvantages, such as the potential for large attorney fees and the possibility that individual class members may receive only a small portion of any settlement or judgment.

Also see

• Tort law
• Civil procedure
• Consumer protection
• Securities fraud
• Legal ethics