Clearinghouse Research reported that in 2022, there were 15 class action lawsuits with settlements totaling more than $63 billion. Class action lawsuits often make headlines, especially when they involve large corporations and potentially hefty settlements.
While these types of cases seem straightforward in the media, there is a lot of misunderstanding about what they entail and how they operate. Many misconceptions revolve around the idea of a class action lawsuit. By debunking these myths, you can better understand this complex legal process and what it might mean for you.
Everyone receives a large payout
One of the most common misconceptions is that if you join a class action lawsuit, the courts guarantee you a significant payout. In reality, the settlement amounts vary widely depending on the case. While some participants might receive a substantial amount, others might get a very nominal sum or even nothing at all. The total settlement gets divided among many people, and administrative costs also come into play.
It is always better to file individually
Some believe that by filing a lawsuit individually, rather than as part of a class, they stand to gain more. This is not always the case. Class actions can often provide the benefit of pooled resources, sharing evidence and strength in numbers, making it harder for the opposing party to dismiss or overlook the claims.
Class action lawsuits are quick
Contrary to popular belief, these lawsuits do not always wrap up quickly. They can be lengthy, sometimes taking years to reach a conclusion. This is due to the complexity of the issues, the number of people involved and the process of ensuring everyone gets notified.
Only the lead plaintiff matters
While there is usually one or more lead plaintiffs in a class action, this does not mean that they are the only ones who matter. Every participant in the class has a stake in the outcome, and the lead plaintiff represents the interests of everyone involved.
Opting out is rare
You might think that once a class action lawsuit gets filed on a particular issue, everyone affected will want to join. However, some choose to opt out of the lawsuit, either because they believe they can pursue a separate case with a better outcome or for personal reasons.
Misconceptions about class action lawsuits abound, but by understanding the realities, you can make informed decisions. Remember, class action lawsuits play an essential role in holding entities accountable and providing a platform for voices that might otherwise go unheard.