Attorney Jeffrey Kaliel has extensive experience in class action lawsuits at the national and state level. His expertise has helped consumers fight against unsavory lending practices and improved labeling for safety on a wide array of products, including pet foods. Despite the change class action suits can bring about, Kaliel realizes they can be a bit hard to understand when a person has never been a plaintiff.
Jeff Kaliel’s offers a basic guide to class action lawsuits
How a lawsuit becomes a class action
Class action lawsuits start when a group of people have the same complaint against a defendant. Most class action suits start with a group of at least 20 plaintiffs with many having a few dozen or more at the onset. With a class action, a case can be resolved with one lawsuit instead of dozens, hundreds or even thousands of individual suits.
Through collective action, better representation is generally achieved and the cost of litigation is lowered, Jeffrey Kaliel reports. This makes bringing a class action suit particularly effective when claims impact an individual consumer greatly but would cost more to fight than a recovery justifies. For example, a consumer who falsely charged hundreds or even several thousand dollars for an insurance policy or who lost funds through willful mismanagement of an investment or fraud, may not be able to justify the initial costs of filing a suit solo but when joined together with other victims, recovery becomes possible. In fact, many attorneys who take class action suits will do so on a percentage basis that defers fees until a successful resolution of the case.
Identifying potential plaintiffs
When a class action lawsuit starts, a group of core defendants may be working together to start a case, but there are often many other individuals who were also victims of a scam, privacy violation or unsafe product. In these instances, potential defendants may be contacted by mail or email due to a court order. Often communications are delivered via the entity being sued, such as a social media service or an insurance provider.
Case resolution and disbursement
How funds in a class action lawsuit are disbursed is based on the terms set forth in an original agreement or any amendments. Larger class action lawsuits are generally designed where plaintiffs entering the suit later are not penalized.
Some suits are focused on changing policies and procedures, so a successful resolution means an update to business or governmental procedures or increased oversight. Others may lead to the establishment of funds to provide financial relief to victims in specific situations or for use on specific projects. For example, a class action suit following a chemical spill may establish a fund for the medical expenses and support of victims. A portion of funds may also be attributed to environmental restoration efforts and other needs of the region where the spill occurred.
Other suits treat the settlement more like a pot, and it is either equally distributed among plaintiffs or awarded based on a previously established rubric reviewed in court and subject to a period where challenges could be filed. In these scenarios, plaintiffs meeting more criteria may receive a higher award. For example, a class action against a mutual fund for inadequate oversight may feature plaintiffs with 10 years of investments or investments of $100,000 plus alongside those with two years of history and less than $10,000 invested. Both are entitled to a settlement, Jeff Kaliel notes, but the impact is disproportionate, so the award amount would be too.