A class action lawsuit is one where a lawyer
brings a civil suit that claims to represent a class
of people against a defendant or defendants.
For the suit to be a class action, the court must
agree to class action status or it may decide to
combine several individual lawsuits into a single
class action. Commonly, this type of lawsuit
is used when a product being sold by a company is
found to have harmed a large number of individuals
and it is not practical to bring hundreds or
thousands of small suits. Lawyers love to find
a cause to bring a class action lawsuit on behalf of
a large group of claimants because often the legal
fees alone can run into the millions of dollars.
When a class action lawsuit is brought, generally
the names and addresses of all the possible claimants
are requested from company sales records, newspaper
advertisements and other sources. If a claimant
agrees to be part of the class action (usually at no
cost to the claimant) and accepts the eventual
settlement, that person will have no further claim
against the defendant. The claimant, in most
cases, may also refuse to join the class action suit
and bring an individual suit of his or her own.
An example of a typical class action suit was one
brought by lawyers representing businesses and
consumers against Microsoft California in 2004.
The suit was over violations of California anti-trust
laws concerning Microsoft software. Microsoft
agreed to settle the case for $1.1 Billion in vouchers
for common Microsoft software to be sent to the class
action members. The vouchers were for a $5.00 to
$26.00 credit per software package with two thirds of
unclaimed vouchers going to California schools.
The lawyers asked the court for an award of $275
Million to cover fees and expenses.
Most class action lawsuits provide for a small
dollar amount to be recovered by a large class of
claimants. If the number of claimants is very
large, the legal costs involved with a class action
lawsuit can be huge.
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