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What to consider before filing a class-action lawsuit

On Behalf of | May 22, 2020 | Class Actions

Filing a class-action lawsuit in Missouri can leave the plaintiff with many unanswered questions. Not all product failures or inappropriate business practices qualify for a class-action lawsuit.

This type of lawsuit requires a few details other lawsuits do not need.

Class action requirements

The American Bar Association outlines the requirements for a class-action lawsuit. Class certification requires a live claim, a clear definition of who is in the class and class representatives that meet that definition. The class must include at least 40 members with an adequate representation guided by knowledgeable legal representation.

This Rule 23 for class actions requires an additional requirement to be met under subsection 23(b). There are four options depending on the amount of money the plaintiffs seek or the type of case.

Meeting these requirements may pose challenges for the leading plaintiff, especially if they cannot find enough willing class members to participate.

Effect corporate change

Consumer Action states that these cases can promote “fair corporate behavior.” Small injuries such as inappropriately applied bank overdraft fees can repair the harm caused to consumers. These types of awards do not necessarily bring the financial windfall of other class actions, but they can have a profound effect on business practices that affect more people.

When filing a class action, a business may try to block the lawsuit by lobbying for “tort reform.” These companies rely on “take-it-or-leave-it” terms preventing the opportunity for class actions. These terms require consumers to take their grievances through arbitration, but the Consumer Financial Protection Bureau passed a ruling in 2017 maintaining a consumer’s rights to a class action.

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