A gavel with a law book - Class Action

Debunking 10 Common Misconceptions About Participating in a Class Action Suit

We sought insights from ten experts, including a Law Professor and a CEO, to debunk common misconceptions about participating in class action suits. Their responses, ranging from “Class Action Participation Isn’t Costly” to “Active Participation Needed in Class Actions”, shed light on the realities of class action suits and help dispel prevalent myths.

  • Class Action Participation is Costly
  • Guarantees Large Payouts
  • Much Personal Effort is Required
  • They Are Always Frivolous
  • Joining Class Actions is Convoluted
  • Require a Major Time Investment
  • Lawyers’ Payouts Are Immense
  • Small Claims Do Not Matter
  • There is a Set Plaintiff Number
  • Active Participation is Needed

1 Class Action Participation is Costly

People may think that it is costly to participate in a class-action suit. However, the attorneys for the class are paid only if they prevail in the case through a judgment or settlement. Only then are the fees, expenses, and costs paid to the class attorneys from any common fund generated by the lawsuit or from defendants who are required by statute to pay.

If the class attorneys do not prevail, they will be paid nothing. In any event, the class members are not responsible for any of the expenditures or fees.

David Levine, Sullivan Professor of Law, University of California College of the Law, San Francisco

2. Guarantees Large Payouts

Joining a class-action lawsuit ensures a large cash payout. In practice, the payments can vary greatly. The settlement amount is determined by variables such as the strength of the case, the number of participants, and the defendant’s ability to pay. While some class members may receive large sums, others may only receive small sums or coupons.

Tim Allen, Director, Oberheiden P.C.

3. Much Personal Effort is Required

Some believe participating in a class action will take significant time and effort. Officials do not compel class members to participate actively in the legal process. They may be required to supply basic information to demonstrate their eligibility, but the assigned attorneys mostly handle the legal proceedings.

Cindi Keller, Communications Coordinator, The Criminal Defense Firm

4. They Are Always Frivolous

Some believe that class-action lawsuits are frivolous and only benefit lawyers. While some dubious cases have been, many class actions address serious issues such as consumer fraud or product faults. They serve as a mechanism for individuals to seek collective justice when confronted with a common issue.

Tiffany Hafler, Marketing Coordinator, Blockchain Lawyer

5. Joining Class Actions is Convoluted

A common misconception about participating in a class-action lawsuit is that it could be more convenient and time-consuming. While it’s true that class actions can be complex and may take time to resolve, the misconception lies in assuming that individual participation requires significant personal effort. In reality, joining a class action is typically straightforward.

Class members often receive notifications and can opt in or out with minimal effort. Legal representation is typically provided contingency, meaning no upfront costs. While the resolution process can be lengthy, ensuring a fair outcome and holding corporations accountable for their actions is often necessary.

Class actions protect consumers’ rights and promote justice in widespread harm or wrongdoing cases.

Valerio Zanini, Founder, 5D Vision

6. Require a Major Time Investment

People often pass on being involved in class-action lawsuits because they believe it will be too much of a time investment. This is generally not true, as most of the time investment will be on your legal team. They justify taking a percentage of the settlement or judgment at the end, not on individual members of the suit.

You’ll never see the inside of a courtroom, and all you’ll need to do is fill out some forms and provide the necessary documentation.

Kate Kandefer, CEO, SEOwind

7. Lawyers’ Payouts Are Immense

Lawyers will receive the lion’s share of the money. Yes, the lawyers in class-action lawsuits will receive a percentage of the winnings, but the courts scrutinize those payouts. If they’re not deemed reasonable and proportional to the time and effort they dedicated to the case, they’re not approved by the court.

And when a legal team is paid a percentage of the winnings, they’re personally motivated to fight for the highest settlement possible. More money in your pocket means more money in theirs, so they’ll work hard to get the plaintiffs the money they deserve.

Robert Kaskel, Chief People Officer, Checkr

8. Small Claims Do Not Matter

Contrary to popular belief, even small claims can significantly impact a class-action suit. While it may seem like individual compensation would be minuscule, it can add up to a substantial amount when combined with the compensation of others in the same situation.

Furthermore, participating in smaller cases can help pave the way for larger cases and hold companies accountable for their actions.

Zach Shelley, Founder and CEO, A-List Properties

9. There is a Set Plaintiff Number

To file a class action, a massive group of plaintiffs is required. No exact number of people is needed to successfully file a class-action suit, as the judge determines whether the case moves ahead on a case-by-case basis.

Most judges will only proceed if at least a few dozen people are in the group. However, even 20 could be enough if the case of wrongdoing seems strong. A smaller group should not discourage you from seeking out what you deserve!

David Janovic, Founder and CEO, RJ Living

10 Active Participation is Needed

One common misconception is that joining a class-action suit requires no effort or involvement. While it may involve less active participation than an individual lawsuit, class members often need to stay informed, respond to communications from attorneys, and provide necessary documentation. Being an active and informed participant is crucial to ensure your interests are represented effectively.

Michael Chen, Head of Growth, Notta

Absorbing the Expert Insights: A Path to Clarity

As you navigate through the enlightening responses from our panel of experts, it’s clear that the class action landscape is laden with misconceptions. These insights serve as a beacon, cutting through the fog of misinformation. Here’s a quick digest to keep the key takeaways at your fingertips:

  • Cost of Participation: The journey is virtually cost-free for class members, with attorneys shouldering the risk.
  • Payout Expectations: Payouts are a mixed bag, hinging on various factors inherent to the case.
  • Personal Effort: Minimal personal involvement is required, yet staying informed is a golden rule.
  • Purpose and Impact: Far from frivolous, class actions are gateways to justice, especially in the face of consumer fraud or product faults.
  • Ease of Joining: The door to class actions is open wide, with a straightforward entry and exit mechanism.
  • Time Investment: Your time is preserved, with the lion’s share of the effort borne by your legal allies.
  • Lawyers’ Compensation: The legal team’s reward is under the judicial microscope, ensuring fairness.
  • Significance of Small Claims: Every claim is a building block, contributing to the collective pursuit of justice.
  • Number of Plaintiffs: There’s no magic number; the strength of the case is the guiding star.
  • Level of Participation: While less demanding, a proactive stance enriches your class action journey.

Choosing Your Legal Path: Class Action, Mass Tort, or Individual Claims?

Understanding the legal avenues at your disposal is crucial when faced with a legal difficulty. Let’s demystify when it’s apt to opt for a Class Action, venture into a Mass Tort, or pursue an Individual Claim.

  • Class Action:
    • Ideal for: A multitude sharing common grievances against a defendant.
    • Benefits: Economies of scale, collective bargaining power, and streamlined proceedings.
  • Mass Tort:
    • Ideal for: Individuals affected differently by the same defendant, necessitating individual assessments of the damages.
    • Benefits: Tailored claim evaluations, potential for higher compensations, shared investigative costs.
  • Individual Claims:
    • Ideal for: Unique cases with distinct circumstances and damages.
    • Benefits: Personalized attention, customized legal strategies, and potentially higher compensation.

In the realm of legal redress, the route you choose significantly impacts the journey and the destination. The key is to match the path with the peculiarities of your case, ensuring it resonates with your circumstances and the broader legal scenario. Your legal counsel is your compass in this venture, guiding you through the complexities and toward a realm of justice and compensation.