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Class action refers to a legal situation that allows a group of individuals with a common legal complaint to pursue a case against a defendant or group of defendants. Often class actions are brought against large corporations by a group of non-acquainted plaintiffs who have suffered the same wrongdoing at the hands of the defendant.
After a person or group of persons makes a legal complaint against a corporation, it is up to the district court to determine whether there are enough people with the same complaint to certify the case as a class action. Class action attorneys work to gather a large enough group of plaintiffs to encourage a class action settlement or litigation resulting from the judge''s certification of the case as a class action.
Although class actions can go to litigation, class action settlements are the preferred legal outcome. The law favors class action settlements because they allow for the conservation of judicial resources that would be spent during litigation.
Settlements in class action suits are usually agreed upon by both parties prior to the court''s ruling on a motion to certify a class. However, they can also occur after the class action has already gone to litigation.
There are, however, times when class action settlements are unfair to the participants. Examples of such cases include situations when a proposed settlement fails to create a substantial return for the class, a class action that was filed as an action for compensatory damages is settled without compensation at all yet the attorney fees are astronomical, the settlement seems more beneficial as a marketing tool for the defendant than it does for the plaintiffs, or the attorney fails to notify the class of the fees that will be sought out of the settlement.
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