What you Need to Know About Class Action Settlements in California

A class action lawsuit combines thousands of small claims into a single claim against an entity who has caused them damage. This is normally done for example against big businesses that have violated the rights of their consumers by offering defective products. A single consumer’s claim would be too small while being very costly, but when combined, they make a credible force.

Most class action lawsuits are settled before proceeding to full trial. This is because many big defendants prefer to settle outside the court rather than risk the court awarding huge amounts in case the court rules against them.

A class action lawsuit has several defining characteristics; it is not necessary for all plaintiffs to testify in court and in the case the court rules in favor of the plaintiffs all the members of the class (those who have joined the lawsuits) stand to benefit.

Who are Class Representatives?

These are the people who are named as complaints on the lawsuit. They represent others not in court. They are also called lead plaintiffs as they participate in initiating the lawsuit. Typically they are awarded a higher amount from the award as they commit more energy, time and money in the lawsuit.

What is fairness Hearing?

Before a settlement is finalized, it must be approved by the court. The court holds a fairness hearing where the interests of all members in the class are considered.  When doing this, the issues considered are:

  • The number of members in the class
  • The number that is likely to share in the settlement
  • The amount that is likely to go to each class
  • The type of benefits to be awarded
  • The likelihood of the plaintiff’s case failing in a full
  • The extent of harm that was incurred by the actions of the defendant
  • Whether the defendant is committed to changing the harmful actions

If the court is satisfied that there is fairness in the proposed settlement, an approval is given for finalization of the settlement.

A notice is then sent to all members of the class on the proposed settlement. The notice explains the procedure for those wishing to participate in the settlement, and those who would like to make an objection. Any objectors can also do so in person during the fairness hearing.

All objections are considered and when the court is through with them, the final approval for a settlement is done.

What options do Class Member have?

Members who want to participate in a class action must opt in i.e. register their names as plaintiffs. Those who would like to pursue redress in individual capacity opt out meaning they do not wish to be named as plaintiffs in the lawsuit. Typically, there are few people opting out as the benefits outweigh the time and money of pursuing justice individually.

How much are settlement benefits?

Compensation in a class action is done according to the harm on different class members. If it is an employee class action for example, the employees might get back pay in underpaid wages.

Class action in California is unique in that the settlement must include safeguards against continuation of the defendant’s harmful actions.  For example, a business with defective goods in the market will be forced to stop false advertising.

Get legal assistance

If you think that your rights have been violated in any way, as a consumer, employee, investor or any other situation, and there are others like you, it would be appropriate to approach The Cooper Law Firm for advice on lodging a class action lawsuit.

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About the Author

Fairfield County, Connecticut Attorney David Volman provided personalized legal representation for Family law, personal injury, bankruptcy, criminal cases, real estate & business law.