When a person is wronged, they may be motivated to sue the person that did the harm. But sometimes the claim is too small to justify paying the legal fees incurred to file a lawsuit, and the plaintiff prefers to involve anyone that may have been affected by the defendant. This spreads out the costs and saves time rather than each person individually suing the defendant for damages.

A class action suit can be more successful than an individual suit in cases like this, but a lot goes into filing the suit. Find out exactly what a class action suit is, how it works, and how you should proceed if you are a part of one. 

Understanding the Class Action Lawsuit

A class action lawsuit is a case brought against a defendant by a group of plaintiffs. One person represents the plaintiff, but there could be hundreds or thousands of people in on the claim depending on the lawsuit.

The outcome of the lawsuit affects everyone listed in the suit. So for example, if the judge sided with the plaintiff, all parties in the plaintiff group benefit from the claim, receiving a portion of the proceeds according to the judge’s orders.

Getting a Class Action Suit Certified

In order to file a class action suit, a judge must certify that it meets the criteria. This starts with the lawyers presenting the judge with a Statement of Claim. This is a claim of the suit and why you’re filing it.

The case must pass the certification test that has five parts:

• There must be a cause
• There must be a clear definition of the class (people suing)
• All class members must have a common issue with the defendant
• Class proceedings must be the easiest method
• There must be a single representative of the class

Most defendants appeal the class action certification, but they aren’t always successful. If the certification stands, you can take the suit to court.

Opting Out

Any part of the class that wants their own suit and doesn’t want to be involved in the class action suit must opt out of the class action suit before they file their own suit. Anyone that does not opt out is automatically included and cannot pursue a claim themselves and are privy only to the outcome of the class action suit.

Who can be the Representative Plaintiff?

The representative plaintiff is the person that takes on responsibility for the case. The representative must be able to be fair and equal to all parties involved. It’s also necessary that the representative doesn’t have any conflicts with any of the other class parties. 

It’s the representative’s job to keep the ‘class’ informed and he/she is responsible for all communication with the lawyers. There aren’t specific requirements a representative must meet to represent everyone, as long as he/she is willing to take on the responsibility.

Does Certification Mean you go to Court Right Away?

If the defendant is unsuccessful in appealing the certification, the case doesn’t necessarily go to court immediately. The defendant may consider a settlement outside of court. This is often preferred because a class action suit can take as long as 10 years in some cases and cost hundreds of thousands of dollars.

Not all defendants settle right away, though. It depends on the case and the details for everyone involved.

Who Pays the Court Costs?

Court costs in a class action suit can get quite high, so it’s no wonder you want to know who pays them. While it’s not required, quite often in Canada, the losing party pays the court costs as ordered by the court. 

The real issue, though, is that the representative plaintiff could be the one responsible for the costs if the class action suit doesn’t go the way they wanted. If the defendant wins, the representative plaintiff may have to pay the court costs, which is why it’s important to talk to a lawyer about the potential of this occurring before you decide to file the suit.

As far as the class’s legal representation, they usually work on a contingency basis. In other words, the litigation is only paid if they win the case. If they do, they pay the fees from the proceeds won during the class action suit with the remaining funds getting disbursed to the other members of the lawsuit accordingly.

Should you Assume a Class Action Suit Will Win?

Class action suits are lengthy, expensive, and time-consuming. There is never a guarantee that you will win, just like there isn’t a guarantee you’ll succeed in an individual suit. Before you file a class action suit, consider the downsides and the potential financial risk you take if you are the representative.

Don’t ever assume a class action suit will be successful or depend on it for your finances. If you win, then consider it a bonus, but if you lose, don’t make the situation harder on yourself by relying on the funds you might have made.

If you’re in financial trouble because of overwhelming debt, consider expert financial support. The professionals at EmpireOne Credit, for example, can help you get back on your feet by helping you get rid of any unsecured debt and learn to manage your finances moving forward. 

Final Thoughts

A class action lawsuit can be a good idea if you’ve been wronged along with hundreds or thousands of others, but it can take a long time to go through. If the damages from the issue caused financial struggle, you could look for other ways to get around it.

If you need to know your options or are looking to file a consumer proposal, bankruptcy, or just need a plan to reduce your debt and get back on track, the experts at EmpireOne Credit can help. Contact us today to learn more about how we can help you get back on track.