Class actions are civil court procedures in which a large group of people (or class) collectively brings a claim to court. The class is represented by a party or group of parties, and, upon receiving a notice of the legal action, individual members of the class may choose to exclude themselves from the proceedings.
This type of collective lawsuit is mostly encountered in the United States, and possible largely due to the English common law principle (which allows judges to make rulings based on precedent, meaning the decisions of courts in previous trials, rather than on statutory law). However, similar types of lawsuits can occur in Europe as well, thanks to modifications bought to the civil law itself.
In the United States, class actions are federal court procedures governed by the Federal Rule of Civil Procedure 23. When a lawsuit is brought to court, a class action attorney defends the rights of a class in which no individual member has sufficient resources to bring the claim to court on their own. Attorney fees are part of the cause of action. Consequently, this large number of individuals with a common cause of action is presumed to have the same goal, allowing class actions to improve group cohesion and sometimes perform other important social functions.
Unfortunately, class action lawsuits can also be abused, and are sometimes brought against large companies during times of stock market fluctuation. While most companies prefer to settle outside of court, wrongful class actions can actually be detrimental to some class members who may have legitimate claims, as well as defendants who have acted appropriately. Moreover, suspicious outcomes of such trials weaken public trust in a country’s justice system.
Critics of this form of lawsuit also claim that class members often receive little benefit out of the trials, and that the large legal fees render the actions unjustified. In addition, some class members may receive unusual awards, while others are pushed to accept a low settlement (in the form of coupons of little value). Another issue concerns the notice that class members receive, which may simply be missed or poorly understood. In this circumstance, some class members may not know what their rights are or how to benefit from such a lawsuit. Although rarely encountered, one variation to this type of trial allows defendants to bring class actions.