The Common Law

Class-action lawsuit – what is it?

I got a packet in the mail saying that I'm part of a class-action lawsuit. I haven't done anything and wasn't looking to sue anyone, but the information I got says I might be able to recover money. What is a class action?

In short, a class action is a lawsuit filed by one or more people on behalf of themselves and a larger group of people who are facing the same issues. A class-action lawsuit is the procedural device used in litigation for determining the rights and remedies for large numbers of people whose cases involve common questions of fact and law.

For example, when large numbers of consumers have been affected the same way due to an allegedly defective product (think asbestos, certain pharmaceutical drugs, breast implants, tobacco, etc.), it is common for the entire "class" of consumers to seek relief through a class-action lawsuit. Another common topic for class actions is securities claims, which involve a lawsuit on behalf of an entire class of stockholders who suffered the same harm as a result of the company's wrongdoing.

There are benefits to class actions. A class action overcomes the problem that most individuals would not bring a lawsuit to recover for a small amount. In other words, a class action ensures that a company that causes widespread harm but does so minimally against each individual must still compensate those individuals for their injuries. In addition, if used properly, class actions can increase the efficiency of the legal process and lower the cost of litigation (i.e., one lawsuit instead of hundreds).

Class-action lawsuits are also subject to much criticism. For instance, many argue that class-action attorneys recover all the money, while class members receive little or no benefit from class actions. Others argue that public respect for the judicial system has been undermined by an onslaught of frivolous class-action lawsuits.

Next week's column will discuss the basics of deciding whether to participate in a class-action lawsuit. In the interim, check out some great informational websites (www.classaction.com, www.bigclassaction.com) if you want to learn more about class actions.

Please submit column suggestions, questions, and comments to thecommonlaw@austinchronicle.com. Submission of potential topics does not create an attorney-client relationship, and any information submitted is subject to being included in future columns.

Marrs, Ellis & Hodge LLP, www.jmehlaw.com.

The material in this column is for informational purposes only. It does not constitute, nor is it a substitute for, legal advice. For advice on your specific facts and circumstances, consult a licensed attorney. You may wish to contact the Lawyer Referral Service of Central Texas, a non-profit public service of the Austin Bar Association, at 512-472-8303 or www.austinlrs.com.

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