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What does it mean to opt into or out of a class-action lawsuit?

On Behalf of | Oct 14, 2022 | Class Actions

If something has caused you to suffer a serious physical or financial injury, chances are good that others also have sustained similar injuries. According to the Legal Information Institute at Cornell University, a class-action lawsuit allows one plaintiff or a small group of plaintiffs to bring a legal cause of action against a defendant on behalf of a larger group.

If you are a party to a class-action lawsuit, you typically do not need to jump through all the hoops that come with litigation. Still, to be eligible for financial compensation, you must be a party to the suit. That is, you must decide whether to opt in or opt out.

What happens if you opt in?

Opting in to a class-action lawsuit means you become a party to the litigation. It also makes you eligible for financial compensation from either a settlement or jury award. Nevertheless, when you opt into the suit, you typically waive your right to take additional legal action against the defendant.

What happens if you opt out?

As you might suspect, opting out of a class-action lawsuit has the opposite effect.  Indeed, because opting out of the suit means you are not a party to it, you are not eligible for any financial compensation that stems from the class-action litigation. Still, you retain an independent right to bring your own legal cause of action.

Just as there are many reasons for opting into a class-action lawsuit, there are some valid ones for opting out. Ultimately, if you are not sure which approach is right for you, it is important to obtain prompt and competent legal counsel.