December 8, 2010
Business law I
Class Action Lawsuits
Class action lawsuits, sometimes called “multiple litigation lawsuits”, can be used when many individuals have been injured by the same product or action of a single defendant. The individuals can come together to seek justice when “their injuries have been cause by defective products, including pharmaceutical drugs, motor vehicles and other consumer products, and medical devices. Other types of conduct over which people have sued as a class include consumer fraud, corporate misconduct, securities fraud, and employment practices.”
Class action lawsuits are most useful to individuals who by themselves could not bring a lawsuit against a large company because the damage done was relatively small. It enables many people to come together and sue as one “class”, and only one case has to be made on behalf of the group of plaintiffs. Legal fees are significantly reduced when the case only has to be made once, even if the damages to each individual in the class were very small. If, for instance, a company was to sell a mouthwash that did not work as it was supposed to, one person would probably not attempt to sue for damages if the amount was only twenty dollars. If one million people who are entitled to remuneration of twenty dollars each come together, it becomes feasible to sue the make of the mouthwash when twenty million dollars is at stake. A class action lawsuit can occasionally be of some benefit to corporations as well. If the maker of that defective mouthwash was to be sued by even one thousand of those million people who bought the product it would be impractical for the company to litigate all one thousand cases. The company would probably have to settle with each individual out of court just to avoid the costs of disputing the claims even if the company was not really liable to pay any damages.
To bring a class action lawsuit against a company in court it must be approved by the court....