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Class action lawsuits provide legal relief to large numbers of individuals who were wronged by a corporation yet suffered relatively small monetary losses. An example would be mothers who paid a premium price for organic infant formula, yet the formula is, in fact, no different than its non-organic counterpart.
Class action lawsuits are typically filed by one person or a small group of people on behalf of all those who were similarly harmed. All the people involved are referred to as “class members.” This means that while the class members are not the ones filing the lawsuit, they will be able to receive a part of any settlement or court award that results from the case.
Without a means to sue wrongdoers for dishonest actions, we would all be at the mercy of small-time cheats. An individual cheated out of $100 would not be able to find a lawyer to represent him/her. But several thousand people cheated out of $100 each have a powerful collective wrong. In a class action for money damages, lawyers who represent the class are generally paid out of the money that’s recovered – called a “common fund” – for the people they are representing. In class actions involving declaratory judgments or injunctive relief, lawyers may be paid by the people who hired them, or in some cases, by the people or companies they are suing. Attorney fees in class action suits are always reviewed and approved by the court.
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