Three-Minute Legal Talks: How Class Action Lawsuits Work

Class action lawsuits are a powerful tool in the American judicial system, enabling a large group of individuals to collectively sue an adverse party in a lawsuit. With origins dating back to the early 19th century in West v. Randall, almost two dozen other countries have since followed the United States’ lead and adopted class action lawsuits in one form or another. This unique form of litigation offers benefits to both parties involved — as well as to the court system — but also comes with its share of difficulties.

In three minutes, Jeff Feldman, professor from practice at the University of Washington School of Law, explains why class action lawsuits can be effective, the requirements for bringing one before the court, the types of cases that are best suited for them, and the advantages and disadvantages involved.

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Jeff Feldman: My name is Jeff Feldman. I'm a professor at the University of Washington, where I teach constitutional law and civil procedure.

Three-Minute Legal Talks: What is a class action lawsuit?

JF: A class action is a type of legal action where one or more people sue on their own behalf individually, and also on behalf of a group — or a class of individuals — who have similar claims.

TMLT: Which types of cases are best suited for class action lawsuits?

JF: Cases where a party's actions or conduct have adversely affected a large number of people in a similar way. Class actions typically involve things like defective or harmful products, environmental or pollution claims, securities fraud cases, mass casualties, like aircraft accidents. They all have in common that they are cases where a defendant’s conduct affects a large number of people in a similar manner.

TMLT: What are the requirements for a class action lawsuit?

JF: The law imposes four requirements. The first is that the group that comprises the class has to be so large that it's simply impractical to join all the individuals who have similar claims as actual parties to the case. The second requirement is that the class members all must have somewhat similar claims. Claims have to share common questions of law or fact. The third requirement is that the claims of the individuals who serve as class representatives must be typical of the claims of the entire class. Requiring that the class representatives’ claims to be typical, helps ensure that the representatives simply have some skin in the game, and that they're going to be capable and motivated to litigate the case in a manner that's consistent with the interests of the class and the individuals that they are representing. And then fourth, and finally, the class representatives and the lawyers who handle the case have to have the ability, the skills, the experience and the resources to be able to adequately represent the class.

TMLT: What are the benefits of pursuing a class action?

JF: The first is judicial efficiency. It's obviously more efficient for a court to resolve one large case than to hear hundreds or thousands, or even tens of thousands, of individual cases. Secondly, there can be economies of scale that are realized. Sometimes claims with small individual damages are not feasible to be brought as individual lawsuits. A class action allows a group of small claimants to take on a large defendant much like allowing a lot of small Davids to take a shot at taking down a single large Goliath. A class action also can help ensure that any recovery that's realized is equitably divided, which can be significant when a defendant has limited funds available to satisfy the claims of the class members. And finally, combining the claims into a class action can avoid the risk of inconsistent judgments that can occur when multiple claims that are similar are litigated separately in individual courtrooms across the country.

TMLT: What are the disadvantages?

JF: There are several possible disadvantages. One is that plaintiffs who are absent — class members who are not participating directly in the case — can be prejudiced insofar as they can’t advocate directly by themselves to the court. Secondly, there is a risk of inadequate representation, and even disloyalty by the class representatives and by class counsel. In addition, managing a class action can be complex and cumbersome. Imagine trying to keep track of thousands, or hundreds of thousands, or millions of claimants. And then finally, a class action can have a significant impact on the likelihood of any settlement being realized. A defendant might find it economic and might have a lot of reason to settle an individual single claim. But if you bring a lot of claims together and the total damage amount has to take care of thousands, or hundreds of thousands of claimants, the cost might make the settlement calculation very different for a defendant.