Should I Join a Class-action Lawsuit?

Most of the time, the first time you will hear about a class-action lawsuit that may affect your rights is through the mail. You may receive a letter stating that you are one of the individuals identified that may have been affected by the defendant’s actions. This letter gives you an option to opt-out or to opt-in and some requirements to do either.

These class-action notices usually raise more questions than they answer. For example, should you join the class-action lawsuit? What are the consequences if you do not join? And how do you know you are receiving the right amount of compensation if you do join?

This article contains answers to these common questions that could potentially help you decide how to respond.

Should You Join a Class-action?

When you receive a notice regarding a class-action lawsuit you should always read it very thoroughly. This will help you decide whether it actually applies to you. Many times, you may receive a notice because they are required to send it to people who may qualify. The attorneys for the class (the group of people who may have been negatively affected by defendant’s actions) simply have reason to believe that you might qualify as a member of the lawsuit.

You do not have to do anything if you find that the class-action lawsuit does not apply to you. However, if the notice does apply to you, you should read the notice very carefully to see what kind of compensation they are offering if the case is settled.

If there you find that there is a significant amount of money at stake in the lawsuit, or you realize you were significantly wronged, you can opt out of the class action and file your own lawsuit. You can contact the attorneys who filed the suit or your own attorney. Contacting legal council may be essential because participating in the class-action lawsuit may affect your rights to sue the defendant in the future. However, if your connection with the product entails only buying one at a grocery store years ago, finding receipts and proving harm caused by the product could be challenging—and most likely not worth the effort.

If you decide it is not worth it to bring a case on your own, then joining the class action is usually a good choice. You can use any evidence of the defendant’s wronging (if you have any) be added to the larger pool of evidence that the class action attorneys are collecting.

Are You Receiving Enough Money?

When you receive a letter regarding a class-action lawsuit it is typically related to a company with deep pockets like Target or Capital One. Before you start daydreaming about what you will do with all your money, consider that class-action lawsuits rarely end with large payouts to consumers.

Typically, only the attorney and the represented plaintiff(s) are the individuals that stand a chance of obtaining a sizable award. If someone feels that they have been wronged, they can get in touch with a lawyer who specializes in class-action lawsuits. The person who initiates the lawsuit is called the named or represented plaintiff.  This named plaintiff gets a bonus of anywhere between $5,000 and $50,000 in incentive pay when the suit settles. It pays to see if lawyers are looking for represented plaintiffs.

However, the notice that you received means that you have the opportunity to become of the “class members.” Members of a class can number in the millions. The amount you receive will be based on the size of the final settlement and the number of individuals who volunteer to be part of the lawsuit.

What Should You Do?

The decision to join a class-action lawsuit will depend mostly on whether you want to pursue a claim on your own. This is strictly a personal decision. You can file a lawsuit with a separate attorney or join the existing plaintiffs and reap the benefits of potentially landing on the winning side of the case.

 

Matt Pfau is an attorney and founding partner at the law firm Parry & Pfau. Matt has a background in business consulting, estate planning, business start-ups and bankruptcy and is licensed to practice in both Nevada and California. A partner in the firm Parry & Pfau, he can be reached at 702-912-4451 or matt@p2lawyers.com.