How to Join a Class Action Lawsuit

Joining a class action lawsuit is easy, in many cases, you’re automatically part of the lawsuit. Before we continue, what is a class action lawsuit? Class action lawsuits allow a large group of people who have experienced the same or similar injuries to come together and sue the defendant as a “class.” A single lawsuit can be filed on behalf of every member of the class and each member will receive compensation. Class actions are particularly useful in situations where many individuals suffer small injuries. When filing an individual lawsuit would not be financially justifiable, joining a class action lawsuit can allow you to recover for your injuries, however minor.

Is It Worth Joining a Class Action Lawsuit?

In many situations, it is worth joining a class action lawsuit, as there is no cost to join as a member of the class. However, if you choose to join a class action lawsuit, you forfeit your right to pursue an individual lawsuit against the defendant. If you suffered more serious injuries are than other plaintiffs in the class, you could recover far less than you deserve in a class action suit. Before joining a class action, make sure you consult with an experienced attorney.

How Is Money Divided in a Class Action Lawsuit?

There are several methods that can be used to divide money in a class action lawsuit.
Pro Rata Class Action Settlement

In “pro rata” class action settlements divide money equally among the members of the class. Each class member’s share is determined by either the total number of class members or the number of valid claims submitted, based on the language of the settlement agreement. In these types of class action settlements, the per-member award can become smaller than originally anticipated if a large number of valid claims are filed.

Common Fund Class Action Settlement

With “common fund” class action settlements, the defendant pays money into a common fund to be divided among class members using a formula chosen by the parties. The defendants usually know the identity of all class members in these types of settlements.

Claims Made Class Action Settlement

The “claims made” settlement type is most commonly used in class action lawsuits where it is impossible to identify every class member. In these situations, each class member must submit a valid claim to receive compensation, and the defendant will pay the total value of claims submitted. In these types of class action settlements, awards and attorneys’ fees are handled separately for each class member.

How Much Money Do You Get in a Class Action Lawsuit?

The amount of money you get in a class action lawsuit will vary widely depending on the facts of the case, the size of the class, the type of injuries suffered, the size and economic status of the defendant, and the settlement distribution method.

While many class action lawsuits settle for millions of dollars, when divided among millions of class members, individual awards can be as low as a couple of dollars. However, some class action lawsuits can result in substantial awards for each class member.

How Do I Join a Class Action Lawsuit?

Most class action lawsuits are “opt-out” lawsuits, which means that you do not need to do anything to be included in the class. Everyone whose legal interests are represented by the lawsuit will be automatically included as part of the class unless they decline to participate.

However, some class actions are “opt-in” lawsuits, which means you must take action in order to be included in the class. Generally, as a potential class member, you will receive notice of the class action lawsuit that will provide information on how to join the class.

How Long Do Class Action Lawsuits Take To Settle?

The length of time that a class action takes to settle depends on various factors, such as the type of case, the number of class members, and whether a settlement offer is accepted. While some class action lawsuits can result in a settlement in a few months, it’s more likely that a class action will take at least two or three years to fully resolve.

Do You Pay Taxes on a Class Action Settlement?

Whether you pay taxes on a class action settlement depends on the type of compensation (known as “damages”) you receive. Generally, money paid to compensate for a physical injury is not taxable income. However, emotional distress damages are taxable, unless they are triggered by a physical injury. Punitive damages, back pay, and interest are all taxable income.

Should I Contact the Law Firm Representing Plaintiffs in a Class Action Lawsuit?

Whether you need to contact the law firm representing plaintiffs in a class action lawsuit depends on the type of class action. For opt-out class actions, you will typically receive a written notice by mail informing you that you have been included as part of the class, and you won’t need to take any further action to participate. For opt-in class actions, you’ll need to follow whatever instructions the notice provides for how to join the class. Often, this will require you to contact the law firm representing the class.

If you think that you should be part of a class, but never receive a written notice, search for information on the lawsuit online. Many class action lawsuits have a website that provides information about the suit and how to join the class. Typically, you will join by contacting the law firm representing plaintiffs.

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