Class action lawsuits provide a powerful way for individuals to unite against large corporations, turning smaller claims into a collective force for justice.
These lawsuits enable people to challenge unfair practices, hidden fees, and unsafe products that might otherwise go unaddressed.
However, the path to starting a class action lawsuit is often complex and filled with obstacles, making it feel like a legal maze.
In this guide, we'll cut through the complexity, showing you exactly how to start a class action lawsuit and navigate the process with clarity and confidence.
Key takeaways
- Class actions unite many under one case: A class action allows individuals with similar claims against a defendant to combine their lawsuits into one, making it easier and more efficient to seek justice for widespread issues like unfair practices or unsafe products.
- Eligibility for class actions relies on four key criteria: To start a class action, the case must meet the requirements of numerosity (enough people involved), commonality (shared legal issues), typicality (lead plaintiff's case is representative), and adequacy (fair representation of the class).
- The class action process involves several steps: From confirming eligibility and finding a lead plaintiff to filing the complaint, obtaining class certification, going through discovery, and possibly settling or going to trial. The class action process requires significant legal steps and expertise.
- Settlemate simplifies claiming your share: If you're not up for leading a class action, Settlemate helps by matching you with relevant class action settlements, guiding you through the claims process, and sending real-time updates so you don't miss out on compensation.
What is a class action lawsuit?
A class action is a lawsuit where one or a few plaintiffs represent a much larger group of people who have similar claims. Instead of hundreds of individuals filing nearly identical lawsuits, a class action aggregates the claims of numerous people into a single proceeding.
When and why would you start a class action lawsuit?
How do you know if your situation calls for a class action?
The general rule is that when many people have been harmed similarly by the same defendant, it would be impractical or too costly for each person to file individual lawsuits relative to their damages.
Here are some common scenarios that scream for a class action:
- Widespread small harm: When millions of customers are overcharged small amounts, like $5 each, individual lawsuits aren't feasible. But pooled claims in a class action can force the company to pay everyone back at once. Classic examples include banks adding small fees or telecom companies adding hidden charges, individually insignificant but collectively a significant issue.
- Corporate misconduct: Cases like data breaches, product defects, or discriminatory policies are prime candidates. For instance, after the 2017 Equifax breach, a class action helped secure a $425 million settlement for 147 million affected people, including free credit monitoring and compensation. It's a prime example of "strength in numbers": one breach, millions harmed, one consolidated lawsuit to address it.
- Efficiency and consistency: Courts prefer one class action over thousands of individual cases, providing consistent results. For example, when a defective car part causes similar harm across many cars, a class action resolves all claims in a single court decision, avoiding conflicting judgments.
- Behavior change and public accountability: Class actions often include non-monetary relief, like product fixes or business practice changes. A class action brings public attention and pushes companies to make broader reforms, which a single lawsuit might not achieve.
- No viable alternatives: If a regulatory agency isn't stepping in to address widespread harm, a class action can directly compensate victims and address systemic wrongs no one else is tackling.
Step-by-step process: How to start a class action lawsuit
Starting a class action lawsuit may seem overwhelming, but breaking it down into clear, manageable steps can make the process easier to navigate.
Here’s how to go from ‘this isn’t right’ to a certified class action:
1. Confirm eligibility
The first step is to confirm that your case qualifies as a class action. You need a situation where a definable group of people suffered the same fundamental issue because of the same defendant.
To qualify, your case must meet four key criteria defined by Rule 23:
- Numerosity: There must be enough people affected that it's impractical to join them all in one lawsuit.
- Commonality: The claims of the class members must involve common questions of law or fact.
- Typicality: The lead plaintiff's claims must be typical of the class, meaning their case reflects the general experience of others in the group.
- Adequacy: The lead plaintiff and their lawyers must fairly and adequately represent the interests of the class.
For example, if only three people were affected, that's likely too few for a class (joinder isn't impractical). But if 300 or 3,000 people were affected in similar ways, you probably meet "numerosity."
Likewise, if everyone's complaint boils down to the same issue (e.g., a defective part that fails in all their cars), you have commonality; if your situation is fairly typical of the group, you meet typicality.
2. Find a lead plaintiff (or be one)
A class action lawsuit requires at least one lead plaintiff, or class representative, who is willing to represent the entire group.
The lead plaintiff's role is crucial, as their case will serve as the central example of the class's claims. If you believe your case is typical of the class's claims, you may be the natural choice to serve as the lead plaintiff.
The lead plaintiff should be someone with a compelling, typical case and the willingness to see the lawsuit through. This person's story and credibility will carry a lot of weight.
For example, in the Roundup litigation, one early lead plaintiff was a school groundskeeper who used the product regularly and developed cancer - a sympathetic and typical case for that class.
3. Retain class counsel
Next, you need to hire an attorney or a law firm with experience in handling class action lawsuits.
Class actions are highly specialized, and it's crucial to have an attorney who is familiar with the nuances of Rule 23 and the various steps involved in managing large cases.
Attorneys handling class actions also need to understand the subject matter of your dispute, whether it's consumer fraud, employment violations, product defects, or anything else.
A key advantage here is that class action lawyers typically work on a contingency fee basis. This means they only get paid if you win or settle the case.
When you approach a firm, treat it like a pitch: explain the wrongdoing, how many people it might affect, and why it's class-action worthy. If they see potential (and the prospect of a recovery), they'll likely take it on and advance the costs of litigation. Once you have lawyers, they will guide the rest of the process.
4. File the class action complaint
Once you've retained class counsel, the next step is to file the official class action complaint with the appropriate court. The complaint is the document that initiates the lawsuit.
The complaint will outline the facts of your case, the legal claims (such as breach of contract or violations of a specific law), and, importantly, request that the court treat the case as a class action on behalf of the defined group.
The complaint will be detailed and will explain why a class action is appropriate under Rule 23. It will also define the class definition (e.g., "all customers in State X who were charged fee Y between 2019 and 2023"), which is the group that the lawsuit will represent. Filing this complaint is a significant milestone, but don't expect things to move quickly at first.
Where to file? Many class actions end up in federal court, especially when the potential class spans multiple states. The Class Action Fairness Act (CAFA) gives federal courts jurisdiction over class actions involving over $5 million in controversy or diverse parties.
5. Seek class certification
This is the big test. Without class certification, the case won’t move forward. After filing the complaint, your lawyers will file a motion for class certification, demonstrating that your case meets all the Rule 23 requirements.
Class certification is often the hardest battle in a class action.
If you succeed, the court will allow your case to proceed as a class action. If you fail, the case could be dismissed or restructured into individual lawsuits, which would likely end the case for many class members.
6. Discovery and negotiation
With the class certified (or certification motion pending), the case moves deeper into discovery - the phase where both sides exchange information, documents, and take depositions.
In a class action, discovery can be extensive, as you'll need to demonstrate the scale of the issue and the damages involved. This phase could take months or even years, depending on the complexity of the case.
Negotiation often starts at this stage. It's not uncommon for class actions to go to mediation (a formal settlement negotiation with a neutral mediator) once evidence is gathered. The reality is, the vast majority of lawsuits settle before trial - some estimates suggest that 95% or more of cases resolve pre-trial, and class actions are no exception.
7. Settlement or trial
Finally, the court holds a fairness hearing (also called a final approval hearing). If the judge finds the settlement is "fair, reasonable, and adequate" for the class, they will approve it, making it imperative.
If there are objections, the judge considers them (and in some cases, objectors can speak at the hearing). Once the settlement is approved, it's official, and we move to the payout stage.
If there's no settlement, the case heads to trial. In a class action trial, the lead plaintiffs and their counsel present the case for the whole class, and a jury (or judge in a bench trial) will decide the outcome for everyone. Trials are risky and rare in class actions, but they do happen, especially if a defendant is confident or a settlement can't be agreed upon.
One notable example is the long-running trial against tobacco companies in the 1990s, as well as the recent class-action trial against a tech company.
If you win at trial, the court will then determine damages for the class (or a process to distribute damages). If you lose, typically that's the end for the class (barring an appeal).
8. Claims and payouts
Finally, the point of the whole endeavor is to get compensation or relief to class members.
Payouts can vary greatly depending on the size of the class and the nature of the settlement. Sometimes, payments are sent automatically based on records, but in other cases, class members must submit forms to claim their share.
There is always a deadline to file claims. For example, in the Facebook privacy settlement, people had to submit a simple form by August 2023 to be eligible for a payout.
A settlement administrator usually handles claims processing, a third-party firm that receives the claims validates them, and later issues payments. If the settlement doesn't require a claim form (for instance, if class members are easily identifiable from company records), payments might be sent automatically to everyone on the list. Either way, payouts often take time.
In large classes, payouts can be small; it all depends on the math. For example, in the Equifax case, consumers who claimed the $125 cash option received around $5 or $20 each, so the high number of claims stretched the fixed fund thin.
Do I need a lawyer to start a class action?
In essence, you don’t need a lawyer to start a class action, but it’s highly recommended.
The process can be complex, and while you could technically handle it on your own, having an experienced attorney makes everything smoother and increases your chances of success. Lawyers specializing in class actions know the ins and outs of the legal requirements and can guide you through each step, from confirming eligibility to filing the complaint. Plus, most class action attorneys work on a contingency fee basis, meaning they only get paid if you win. So while it's not mandatory to have a lawyer, it’s definitely a smart move to ensure your case is set up for success.
How Settlemate guides you through class action settlements
By now, you might be thinking: "This sounds really complicated." And you're not wrong, starting and leading a class action is a heavy lift.
The good news is that even if you're not up for leading a class action, you can still benefit from those that others have fought.
In fact, each year, billions of dollars in class action settlements go unclaimed because people simply don't know about them or find the process confusing.
This is where Settlemate comes in.
Settlemate is a platform that helps individuals easily find and claim their share of class action settlement funds. It matches users with relevant settlements based on their purchases, services, or data breaches, guides them through the claims process, and provides real-time updates on the status of their claims.
Here's how Settlemate helps:
- Smart matching: Settlemate tracks active class action settlements and matches you with ones you qualify for based on your purchases or services.
- Easy claim process: It helps you file claims quickly with no legal jargon or paperwork. Just fill in simple details, and Settlemate does the rest.
- Automatic updates: Receive real-time notifications about your claim status, upcoming payments, and new settlements you may qualify for.
- Personal claims assistant: Settlemate auto-fills your information, reminds you of deadlines, and tracks your claims so you never miss a payout.
In short:
- You don't have to read case law.
- You don't have to deal with piles of paperwork.
- You don't have to wait daily for updates.
Settlemate makes sure companies pay up and puts your share of class action settlements right where it belongs - straight into your hands!
Ready to take action and start a class action lawsuit?
Get started with Settlemate today and efficiently track, claim, and even learn how to start a class action lawsuit to hold companies accountable.
