Class Action Lawsuit Dispute Basics

In some instances an act of negligence can affect more than one person in a similar way. Therefore, all these people are entitled to compensation by filing a personal injury claim against the defendant. Instead of each individual filing their claim or lawsuits against the defendant they may choose to file the claim together forming a class action lawsuit. This article will discuss the basics of a class action lawsuit, how it is formed, procedures and related issues.

To illustrate, Tamara has a legal claim against Company X, however, taking legal action against the company is not practical because her losses are limited and the time and effort of pursuing legal action against Company X will not be a good investment. It turns out that there are a few hundred other people who have had the same claim against Company X. If certain legal procedural requirements are met, these people including Tamara can form a class of plaintiffs in one big lawsuit against the defendant – Company X; therefore, having a class action.

Class Action Dispute Examples

There are a number of different disputes and problems that can affect a large number of individuals and thus form the basis of a class action lawsuit. Some examples of disputes and problems that would result in a class action lawsuit include the following:

• Defective or unreasonably dangerous products – this includes consumer products, vehicles, prescription drugs, etc.
• Unfair or fraudulent business practices related to services – including phone, banking, etc.
• Stockholder claims
• Employment related claims such as discrimination or wage and hour law disputes

To proceed as a class action it is necessary that the class be certified by the court. A class action can be governed by federal or state law depending on the underlying subject matter.