How to Start a Class Action Lawsuit: Step by Step

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When a business lets you down, you might consider a few different avenues for justice.

Should you file a lawsuit? Take them to small claims court?

What about a class action?

We’ve all heard of class action suits — and the settlements that big companies often have to pay out because of them. But how many of us really know how to start a class action lawsuit — or even when it’s the right path to getting justice?

If you’ve been wronged or injured by a company, you’ve come to the right place. This guide will help determine whether a class action can help you — and guide you through the steps to pursue that, if you determine it’s the right choice for you. But we’re also going to look at some alternatives, and how you might be able to get justice in other ways.

What Is a Class Action Lawsuit?

Let’s start with the basics: What exactly is a class action suit?

In layman’s terms, it’s a group lawsuit. A class action is meant to help a group of people who were all wronged, harmed, or injured by a company in the same (or a similar) way. Regardless of how many people join the class action, all their claims will be tried in a single court, and they all receive an equal share of whatever compensation is ordered by the judge presiding over the case.

Class action lawsuits are often good choices for people whose harm was relatively minor. In that case, it may not make financial sense to pursue an individual lawsuit, but a class action makes seeking justice through the courts more viable and valuable.

Why Choose a Class Action Instead of a Civil Suit?

The main thing that differentiates a class action from other types of legal action is that it’s designed for groups to get justice together for similar issues.

But there’s another reason you might pursue a class action instead of a civil lawsuit. Many companies that require their customers to sign contracts include a clause that forbids them from filing civil suit against the company. It gives them other options (with consumer arbitration being the preferred avenue). Small claims court and class action suits are often allowed under these clauses.

How To Determine Whether You Have a Class Action Case

Determining whether your complaint constitutes a class action lawsuit can be tricky, since it requires other customers to sign on and join the complaint.

That’s why this isn’t a process you should try to take on by yourself. If you’re considering a class action lawsuit against a company, you should consult a lawyer first. They can do the research and outreach required to determine whether there are other customers who were similarly harmed who will be willing to join your class action.

Of course, in the U.S., anyone is entitled to represent themselves in court without a lawyer, so you can legally file a class action lawsuit without one. However, because of the complexity involved in the process, your case will be more likely to succeed if you have expert help.

If you want to pursue legal action without having to hire a lawyer, you might have another option. We’ll talk about that in more detail below.

Step-by-Step: How to Start a Class Action Lawsuit

If you choose to pursue a class action, there are a lot of steps that need to happen before it becomes a lawsuit that others can join.

Step 1: Determine Whether the Complaint is a Class Action

If you’re working with a class action lawyer, they’ll listen to your complaint and collect the necessary information to start an investigation. During that investigation, they’ll look for key information that will help determine whether the complaint will succeed as a class action, rather than a form of legal action for one individual.

This may include:

• Finding out how many other people have similar complaints.
• Finding out whether another lawsuit making the same allegations has already been filed.
• Determining the statute of limitations for the complaint, and whether there’s still time to file a lawsuit.

If you’re not working with a lawyer, you should try to answer these questions about your case before moving on to step two.

Step 2: File a Lawsuit

The next step is to draft an official legal complaint, which is a document filed in court that describes the facts of the case and what the complainants are seeking.

In the case of a class action lawsuit, the complaint should also define the “class” of people who might be covered by the suit. This will determine who can join the complaint later if it’s accepted as a class action.

Step 3: Wait for the Class to Be Certified

When the complaint is filed with the court, it’s only a proposed class action. It will not officially become a class action lawsuit until a judge makes a ruling to give it class action status.

The judge will review the complaint, including the facts and the class definition. He or she will decide to either rule the case a class action — at which point others may begin to join with their own claims — or rule that the complaint is not a class action, in which case the lawsuit may be dismissed, or may move forward as an individual lawsuit, depending on the circumstances.

Frequently Asked Questions About Starting a Class Action Lawsuit

These frequently asked questions can help you learn more about class actions, and whether your situation might warrant one.

How Many People Are Needed for a Class Action Lawsuit?

This varies by state. It only takes one person to start a class action lawsuit, but the suit may not move forward as a class action if enough people don’t join.

What Can You Win in a Class Action Lawsuit?

In a class action, the winnings are split evenly among all the complainants. This can be in the form of a settlement, or compensation ordered by a judge. It’s almost always money, in class action cases.

Who Is the Lead Plaintiff or Class Representative in a Class Action Lawsuit?

In a class action lawsuit, one member of the class will be named the “lead plaintiff” or “class representative.” Typically, this is either the person who brings the original claim, or a person appointed by the court. This person acts as the “voice of the class,” which comes with many responsibilities the other members of the lawsuit won’t have. These can include:

• Hiring a lawyer;
• Consulting with the lawyer throughout the lawsuit;
• Representing the wishes and desires of the class;
• Deciding whether to take a proposed settlement;
• Serving as the public face of the class in any media coverage.

Because of these extra responsibilities, the lead plaintiff or class representative might receive more compensation than the other members of the class. The court will determine that.

What Is “Opting In” or “Opting Out?”

If you’re part of a class in an existing class action lawsuit, you should get notified about it. Then, you can choose to join the suit or not.

Once you receive notification that you’re part of a class, generally, that means you’re opted in. Without any further action on your part, you should receive your share of the settlement or compensation ordered by the judge. In some cases, however, you might need to specifically opt in before you officially become part of the lawsuit. Read your notice carefully and it should tell you how to proceed.

Alternatively, if you don’t want to participate in the class action lawsuit, you can opt out. This means that you won’t receive a share of the compensation given to the class, but you maintain other legal rights (which we’ll explain more about below).

What If My Case Is More Extreme or Severe?

One drawback to a class action is that everyone in the class gets an equal share of the compensation, regardless of how they’ve been wronged or injured by the company. If you believe you were wronged significantly more, you might opt out of the class action so you can file your own individual lawsuit. If you are part of a class action, you waive your rights to sue the company individually, regardless of the amount of harm they caused you.

Does It Cost Anything to Join a Class Action?

No. Typically, costs like lawyer fees will be taken from the final compensation before it’s distributed among the class. No one has to pay money to join a class action lawsuit.

Consumer Arbitration: A Simpler Alternative to Class Action

Starting a class action lawsuit is complex. It can be time consuming. You likely won’t get justice for some time.

If you’re looking for a simpler, faster alternative, you might want to consider consumer arbitration. It’s a legal process in which both sides (you and the company) explain your case and present evidence to a neutral third party — an arbitrator — who then makes a legally binding decision about who is in the wrong and what they need to do to fix it. It’s a great way for consumers to get power, justice, and money back where it belongs: in their hands.

Consumer arbitration can be an intimidating process, but you don’t have to do it alone. You can easily get help from FairShake.

FairShake helps guide consumers through the entire arbitration process, from the initial complaint to the final settlement or judgement. We’ve taken on all kinds of big companies: Banks, gyms, phone and cable companies, internet service providers, and more. We can help you stand up to them — and you only have to pay us if you win compensation.

Ready to see how FairShake can help you get your fair shake? Start a claim today.