How to Start a Class Action Lawsuit: A Plain English Guide (2025)

You might be surprised to learn that starting a class action lawsuit costs nothing when you’ve been wronged among many others. Class action lawyers usually cover all litigation expenses themselves, which makes this powerful legal tool accessible to everyone.

Contents

What is a class action lawsuit?Definition in plain English How it differs from individual lawsuits Common types of class action cases Why people choose class action lawsuits Shared legal costs Strength in numbers Holding large companies accountable Who can start a class action lawsuit Eligibility criteria for plaintiffs What makes a valid class Role of the lead plaintiff How to file a class action lawsuit Step 1: Find a qualified attorney Step 2: File the original complaint Step 3: Request class certification What happens after filing Discovery and evidence gathering Court hearings and motions Settlement negotiations or trial How much does it cost to start a class action lawsuit Contingency fee structure Who pays legal fees Court approval of attorney fees How compensation is distributed How settlement amounts are calculated Lead plaintiff vs class member payouts What happens if you have proof Can you opt out of a class action lawsuit Why someone might opt out How to opt out properly What happens if you do Conclusion FAQs References

Class action lawsuits let multiple plaintiffs combine their claims into a single case. This creates a budget-friendly solution that works well for everyone involved. A class action lawsuit happens when one person represents a larger group with similar complaints against the same defendant. This approach becomes especially valuable when you have corporations that don’t deal very well with systemic problems like defective products or illegal business activities. On top of that, it can lead to substantial financial compensation. Settlements range from thousands to millions of dollars. A Pennsylvania federal court case awarded $35.8 million in overtime back wages to affected workers. This piece will explain class action lawsuits in plain terms. You’ll learn about filing procedures correctly and see how these lawsuits work from beginning to end. The cost to start a class action lawsuit might be much lower than you’d expect.

What is a class action lawsuit?

Class action lawsuits serve as a powerful tool in our judicial system that lets groups of people with similar complaints seek justice together. Let’s look at what they are, how they’re different from individual lawsuits, and the types you might come across.

Definition in plain English

A class action lawsuit happens when one person (or a small group) sues on behalf of a bigger group who’ve all been harmed by the same defendant33. The bigger group becomes the “class,” and everyone in it shares the same legal claims against the defendant34.

These lawsuits solve the biggest problem of having too many plaintiffs by letting courts handle what would be impossible if each person sued separately35. The lead plaintiff represents everyone in the class and presents their shared claims in court.

Class actions combine many similar claims into one unified case36. Instead of thousands of separate cases overwhelming the courts, a single lawsuit resolves everything for all parties37. To name just one example, see what happens when a drug company releases medicine with harmful side effects that hurt thousands of patients – these people can team up in a class action instead of filing separate lawsuits34.

How it differs from individual lawsuits

Regular lawsuits pit one plaintiff against one defendant, but class actions bring multiple plaintiffs together under a lead plaintiff38. Individual lawsuits need each person to take part in legal proceedings, but class members usually don’t have to do anything – they’re automatically included if they qualify39.

Class actions are different from individual lawsuits in several ways:

Number of plaintiffs: Class actions need multiple plaintiffs (dozens, hundreds, or thousands), while individual lawsuits usually have just one33.
Legal process: Class actions must be certified (or authorized in Québec). They need to pass specific tests: valid cause of action, defined class, common issues, preferable procedure, and proper representative plaintiff33.
Payment structure: Legal fees get split among all class members, which means minimal upfront costs36. Lawyers typically work for a percentage of the settlement or award39.
Settlement approval: Courts must approve class action settlements to protect everyone’s interests, unlike individual lawsuits where parties can settle privately33.
Individual control: Class members have nowhere near the control that individual plaintiffs do over their cases, including choices about lawyers, settlements, and other major decisions39.

Common types of class action cases

Class actions show up in many legal areas where someone’s actions have hurt lots of people the same way40. These cases usually fall into these categories:

Consumer fraud: This makes up most class actions41. Cases deal with consumer deception for profit, like defective products, false advertising, and breaking consumer protection laws.

Employment: These cases tackle workplace problems like unpaid overtime, minimum wage violations, worker misclassification, missed breaks, and discrimination41. Big names like Kodak, Walgreens, Coca-Cola, Marriott, and Home Depot have paid settlements in these cases42.

Securities fraud: Investors who lost money because of false information from stockbrokers, brokerage firms, corporations, or investment banks can get help through these lawsuits41.

Environmental: Communities file these when pollution or contamination affects many people similarly43, such as oil spills, chemical releases, dirty water, or factory emissions41.

Civil rights: These tackle violations of people’s civil rights, including unfair treatment in jobs, housing, insurance, and credit43.

Privacy/consumer rights: These handle personal data protection violations, including data breaches and violations of Fair Credit Reporting Act and Telephone Consumer Protection Act41.

Product liability: These target faulty products that cause harm and aim to compensate victims while getting dangerous items recalled43.

This information helps you decide if joining or starting a class action lawsuit makes sense for your situation.

Why people choose class action lawsuits

People who face harm from corporate misconduct often find themselves at a disadvantage when seeking justice alone. Class action lawsuits have become a popular legal option because of this. These lawsuits give plaintiffs several advantages when they seek compensation for similar injuries.

Shared legal costs

The financial benefits make class action lawsuits attractive to many people. Legal proceedings can cost too much for a single person, with high fees for attorneys, expert witnesses, and administrative work.

A class action lawsuit offers these benefits:

Legal costs get split among all class members, which cuts down each person’s financial burden44
Most attorneys work on a contingency fee basis and only get paid if they win the case8
People usually pay very little out of pocket during the legal process36

This way of sharing costs makes justice available to everyone, especially those who don’t have much money. Many valid claims would never reach court without this option because the potential payout wouldn’t cover an individual case’s legal costs.

Strength in numbers

Collective action carries real power. A group of dozens, hundreds, or thousands of plaintiffs with similar complaints creates a strong legal force that demands attention.

This group strength shows up in several ways:

Large groups of plaintiffs show courts and defendants that the problem affects many people, not just a few isolated cases8. A class action sends a stronger message than any individual lawsuit that ever spread.

The unified approach gives more power during settlement talks. Companies know about the financial risks and potential damage to their reputation from class action lawsuits36. They become more open to fair settlements instead of risking a costly court verdict.

One expert says, “The company’s attorneys would likely be able to defeat individuals who try to sue the company alone”45. Yet these same attorneys “may find it more difficult to build a solid defense when a large group of people all have the same claim”45.

Holding large companies accountable

Class actions’ most valuable social benefit lies in making powerful companies answer for widespread harm. These lawsuits act as a vital check on corporate power and wrongdoing.

Regular consumers can challenge big corporations through class actions. This legal tool stops companies from avoiding responsibility for actions that hurt many people but cause damages too small for individual lawsuits21.

Class actions’ visibility and financial impact can reshape the scene across entire industries. Companies try harder to maintain good standards and ethical practices because they fear big settlements or court judgments45. Yes, it is common for these lawsuits to result in safer products, fairer business practices, and more corporate responsibility.

These lawsuits also help balance resources between regular consumers and big corporations. A legal expert notes, “When you have a case against a large corporation, they will likely not take you seriously if you file an individual lawsuit”46. Class actions level the playing field and give ordinary people a real shot at justice.

Combining many similar claims helps courts work better40. Courts can handle one well-managed class action instead of thousands of almost identical individual cases7.

Class action lawsuits remain essential tools to get justice, especially against powerful corporate interests. They turn what would be impossible fights for individuals into real chances for accountability and compensation.

Who can start a class action lawsuit

A class action lawsuit needs more than just a valid complaint. Courts have specific legal requirements before they’ll let a case move forward as a group action. Let’s get into who can start these powerful legal proceedings and what qualifications they need.

Eligibility criteria for plaintiffs

Federal law sets clear standards to start a class action lawsuit. You must have experienced actual harm from the defendant’s actions—theoretical or hypothetical injuries aren’t enough. This harm must directly link to the defendant’s conduct and other potential class members must share it.

The plaintiffs must have “standing”—a legal stake in the case’s outcome. This means they’ve personally suffered damages like those of the proposed class. Courts will likely dismiss the case whatever the alleged harm’s scope might be without this personal connection.

On top of that, timing affects everything. Each type of legal claim has a “statute of limitations”—a deadline for filing lawsuits. Even the strongest case becomes impossible to pursue if you miss this window. Anyone who wants to start a class action should talk to an attorney quickly to avoid timing problems.

What makes a valid class

Courts must certify a proposed group as a valid class. The case needs to meet four basic requirements under Federal Rule of Civil Procedure 23:

Numerosity – Individual lawsuits would be impractical because the class is too large. Courts usually want at least 40 potential class members, though no specific number exists in law.
Commonality – Members must share common legal or factual questions. The Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes shows that listing common questions isn’t enough—the proceedings must generate “common answers” that resolve key litigation aspects.
Typicality – Representative plaintiffs’ claims must match the entire class’s experience. Their situations should mirror other class members’ experiences from the same event or conduct pattern.
Adequacy – Representatives must protect the class’s interests fairly and properly, without conflicts between them and class members.

Courts determine if the class is “ascertainable”—with clear objective criteria to identify who belongs and who doesn’t. A court will deny class certification without these elements, and each plaintiff must sue individually.

Role of the lead plaintiff

The lead plaintiff (or “class representative”) becomes the case’s public face with substantial responsibilities throughout the litigation. This person usually reaches out to an attorney first, though attorneys sometimes find potential lead plaintiffs who better represent the class.

The lead plaintiff works with class action attorneys to make vital decisions about the case’s direction. Their responsibilities include:

Picking and keeping lead counsel (courts must approve)
Working out reasonable attorney fees
Taking part in discovery and evidence gathering
Going to depositions and pre-trial hearings
Working through settlement negotiations
Making big decisions based on legal advice

Of course, the lead plaintiff must prioritize the class’s collective interests over personal ones. They stay in regular contact with attorneys through what can take several years. Their credibility and relatability substantially affect how courts, defendants, and class members view the lawsuit.

The lead plaintiff’s role in settlement talks proves vital since they can approve or reject offers that bind the entire class. They often receive an “incentive award”—a bigger settlement share—for their work representing the class.

How to file a class action lawsuit

Starting a class action lawsuit takes careful preparation and follows a structured legal process that just needs specific expertise. You must meet strict legal requirements to succeed. Let me show you how to turn your grievance into a viable class action lawsuit.

Step 1: Find a qualified attorney

Your first and most significant step is to get representation from an attorney who specializes in class action litigation. Class actions need unique expertise because they’re more complex than other legal matters.

Look for these qualifications when choosing a class action attorney:

Specialized experience – Pick a lawyer who has handled many class action cases, especially ones like yours
Proven track record – Check their success rate in getting good outcomes for class members
Adequate resources – Make sure the firm can handle a long legal battle
Communication style – Choose someone who explains legal concepts clearly without too much “legalese”

Your comfort level with the attorney matters since they’ll speak for you and thousands of others. Ask who will handle your case and how they plan to keep you updated.

Step 2: File the original complaint

Your attorney will prepare and file the original complaint after you hire them. This document presents your case against the defendant and sets up the foundation for the legal process.

A well-laid-out complaint has:

Names and details of one or more plaintiffs filing the lawsuit
The defendant(s) responsible for the alleged grievances
A clear description of what led to the lawsuit
A definition of the proposed class members
The legal basis for your claims and what you want to achieve

Your attorney will pick the right court—state or federal—based on the defendant’s location and jurisdiction rules. The defendant must then receive formal notice of the lawsuit so they can respond.

Step 3: Request class certification

Class certification is the make-or-break moment in your lawsuit. The court must approve this step, or your case can’t move forward as a class action and becomes an individual lawsuit instead.

Your attorney will file a motion to show compliance with Rule 23 of the Federal Rules of Civil Procedure. The judge will check if your case meets these requirements:

Numerosity – The class size makes individual lawsuits impractical
Commonality – Class members share common legal or factual questions
Typicality – Your claims represent the entire class
Adequacy – You can represent the class’s interests fairly

The judge decides whether to certify the class after reviewing the evidence. About 20-40% of class action lawsuits get certification. Your case moves to discovery and pretrial procedures if certified. If denied, it might continue as an individual claim or face dismissal.

What happens after filing

The legal process after filing and certifying your class action lawsuit can stretch for months or years. This phase combines thorough investigation and complex legal steps that usually end in negotiated agreements rather than trials.

Discovery and evidence gathering

The discovery phase starts after certification. Both sides share and review evidence during this crucial period. This investigative process typically has:

Document requests from the defendant
Written questions called interrogatories that must be answered under oath
Depositions where witnesses and experts provide testimony

Class action discovery proves more complex than individual lawsuits and might take several years13. Named class representatives must provide documents, answer questions, and participate in depositions. Regular class members usually just need to provide requested information14.

Lawyers focus on discovery related to core issues in the case1. Some class action attorneys suggest using documents from related litigation to cut costs and speed up the process1. The quickest way to streamline discovery is identifying key custodians and data sources early1.

Court hearings and motions

Defendants use various legal tactics to challenge the lawsuit. They usually file motions to dismiss within 2-4 months after filing4. The case moves to discovery if these motions fail.

Both parties file competing motions for summary judgment after discovery. These motions ask the court to decide whether:

Plaintiffs have presented sufficient evidence to prove their claims
Defendants have presented enough evidence to defeat plaintiffs’ claims4

Class actions give defendants more chances to change the litigation’s direction than typical individual actions15. A successful pre-certification motion for summary judgment affects only the named plaintiff. However, a post-certification summary judgment motion binds all class members15.

These motions serve as turning points that can reduce litigation risk15. Even partial summary judgments can decrease a defendant’s potential liability15.

Settlement negotiations or trial

Most class actions (about 90%) settle before trial16. Settlement talks can start right after filing and certification, though they might happen at any stage6. Complex cases may take months or years to settle4.

The settlement follows these steps:

Parties reach a preliminary agreement on major terms
A detailed settlement agreement is drafted
Court reviews the proposed settlement
Upon court approval, compensation is distributed to plaintiffs6

Courts must find settlements “fair, reasonable, and adequate”16. This happens after a formal hearing where the court evaluates the settlement’s merits and listens to parties, counsel, and interested class members17.

Mediators help parties reach common ground during settlement negotiations6. These neutral third parties aid constructive discussion focused on resolution rather than adversarial positioning.

Failed settlements lead to trial—a rare outcome in class actions17. Class action trials follow similar procedures to other civil lawsuits but have broader implications13. Defendants can move to decertify a class during trial if plaintiffs fail to prove all elements of their claims for every class member18.

The post-filing phase shows why class actions need specialized legal expertise. These cases’ complexity requires lawyers who know both procedural details and strategic opportunities.

How much does it cost to start a class action lawsuit

Great news if you want to file a class action lawsuit – you don’t need to pay anything upfront. This makes class actions a real option for people who can’t afford to take on big defendants.

Contingency fee structure

Class action lawyers work almost entirely on contingency fees, which means they only get paid if they win your case. These lawyers believe in your case enough to cover all the original filing costs, investigation expenses, and other legal fees.

“If the case ends in a settlement or a verdict in favor of the plaintiffs, the lawyer(s) take a percentage of the judgment (generally one-third)”19. Lawyers usually take between 25% to 35% of the recovered amount20, though complex cases might cost more.

This payment structure helps arrange everyone’s interests – lawyers want the best possible outcome since their payment depends on results. The system also removes money barriers that might stop valid claims from getting their day in court.

Who pays legal fees

Successful class action lawsuits pay legal fees from the “common fund” – the total money recovered for the class21. This fund covers attorney fees, court costs, and payments to class members.

Courts use two main ways to calculate attorney fees:

Percentage of fund method: Lawyers get 20-45% of the common fund2
Lodestar method: Courts multiply hours worked by reasonable hourly rates, sometimes adding extra for complex cases2

Most courts now ask to check both methods to make sure fees are fair2. The defendant pays these costs through the settlement or judgment amount if they lose.

Court approval of attorney fees

Judges must approve all class action attorney fees before payment – this protects class members22. Federal Rule of Civil Procedure 23(h) requires courts to make sure fees are “fair, reasonable, and adequate”5.

Judges look at several things to assess fee requests:

Money recovered for the class
Quality of legal work
Time spent by attorneys
Case complexity and risks taken22

Class members get notices about attorney fee requests and can object if they think the fees are too high21. Courts reject fees that seem unfair, especially when lawyers would get much more than class members23.

Courts have started to inspect fee awards more carefully when they’re much bigger than what class members get. To name just one example, the Ninth Circuit canceled a $1.7 million fee award that was “more than thirty times larger than the amount paid to class members”23.

How compensation is distributed

Class action lawsuits follow a well-laid-out process to distribute compensation, with funds allocated based on several crucial factors. This knowledge helps plaintiffs understand what they can expect after winning their case.

How settlement amounts are calculated

Class actions typically end up with a negotiated settlement instead of a court verdict11. The court must approve the settlement as “fair, reasonable, and adequate”5 once the defendant agrees to pay a lump sum. A judge’s assessment covers whether class representatives did their job properly, negotiations happened independently, and the compensation matches litigation risks5.

A neutral third party, known as a court-appointed claims administrator, manages the distribution process11. The administrator’s job involves identifying potential class members and handling fund distribution according to court-approved guidelines24. Settlement distribution methods vary by case type:

Claims made: Requires class members to submit forms
Common fund: Divides money among identified class members
Pro rata: Adjusts payouts based on number of claims filed
Vouchers/coupons: Provides product credits instead of cash25

Lead plaintiff vs class member payouts

Lead plaintiffs usually receive higher compensation than regular class members through “incentive awards”7. These enhanced payouts recognize their vital role in representing the class and steering legal strategy9. Courts assess several factors to approve these boosted awards:

Level of involvement in the litigation
Time invested in the case
The lawsuit’s success based on their claims
Risks taken by stepping forward3

The court makes the final call on what’s reasonable—lead plaintiffs might receive thousands extra or nothing at all if funds are limited3.

What happens if you have proof

Documentation needs vary substantially between cases. Some settlements need proof of purchase or supporting evidence24, while others allow small payments (usually around $20) without documentation24.

Settlements with “tiered damages” base compensation levels on provided evidence26. People with better documentation usually receive higher payouts7. The administrator checks all claims and distributes funds according to court-approved guidelines—sometimes through multiple payment rounds if money remains after initial distribution25.

It’s worth mentioning that you must file a claim by the deadline to receive compensation if you get a class action distribution notice24. One attorney puts it simply: “If you do nothing, you’re going to receive nothing”11.

Can you opt out of a class action lawsuit

Class action lawsuits include eligible people by default. You should learn about your right to opt out – many people don’t know they can completely step away from these legal proceedings.

Why someone might opt out

You might want to opt out of class actions if your damages are much higher than what other class members faced. Let’s say your house burned down because of a faulty product while others just needed repairs. Filing your own lawsuit could get you much better compensation27.

The Equifax data breach of 2017 affected 147 million people. Those who took the company to small claims court ended up with bigger payouts than the folks who stayed in the class action27.

You might have other good reasons to opt out. Maybe you have ethical concerns about the case28, don’t want to hurt your relationship with the defendants29, or face unique circumstances the class action doesn’t cover10. These lawsuits often take a one-size-fits-all approach that might not work well for your situation.

How to opt out properly

Read the class action notice you get – it has all the instructions you need. The notice tells you when you must submit your opt-out request12. Miss this deadline and you’re automatically in30.

Write to the court or attorneys handling the case30. Make sure to say you want to opt out and include your full name, contact details, and case information31. Send your request through certified mail with return receipt to have proof you sent it31.

What happens if you do

Opting out lets you file your own lawsuit against the defendant32. The trade-off is that you won’t get any money from the class action settlement or court award12.

The lawsuit moves forward without you, and its outcome won’t affect you28. You’ll need to find your own lawyer and handle your case yourself31. Talk to an attorney first to see if staying in the class action makes more sense for you12.

Conclusion

Class actions are a powerful legal tool that helps people seek justice against corporate wrongdoing. This piece shows how these lawsuits let you team up with others who have similar claims against the same defendant. What’s impossible to afford as an individual becomes doable when people work together.

The process might look overwhelming at first. But there’s a clear path anyone can follow – from finding the right attorney to learning how compensation gets shared. The contingency fee structure means you can take legal action whatever your financial situation might be.

All the same, class actions aren’t always the best choice for everyone. If you have much higher damages or special circumstances, you should think carefully about your right to opt out. A seasoned attorney can help you decide if you’re better off with the group action or going solo.

Class action lawsuits play a crucial role in our legal system. They give regular people the power to hold big corporations accountable. Without them, many corporate misdeeds would go unchallenged because individual lawsuits cost too much. Learning to join or start class actions gives you the tools to protect your rights and help others facing similar wrongs.

Time plays a crucial role in these legal matters. You can lose your chance to file claims forever because of legal deadlines and certification cutoffs. The information here helps you take quick action when needed – whether you’re joining an existing lawsuit or starting a new one.

FAQs

Q1. How much does it cost to start a class action lawsuit? Starting a class action lawsuit typically costs nothing upfront for plaintiffs. Most class action attorneys work on a contingency fee basis, meaning they only get paid if the lawsuit is successful. They cover all initial costs and expenses, taking a percentage (usually 25-35%) of any settlement or judgment as their fee.

Q2. How many people are needed to file a class action lawsuit? There’s no specific number required, but courts generally look for at least 40 potential class members to meet the “numerosity” requirement. The key is that the class must be large enough that individual lawsuits would be impractical. Other factors like commonality of issues and adequacy of representation are also considered.

Q3. What are the steps to initiate a class action lawsuit? The main steps include: 1) Finding a qualified class action attorney, 2) Filing an initial complaint that outlines the case and defines the proposed class, 3) Requesting class certification from the court, 4) If certified, proceeding with discovery and evidence gathering, and 5) Moving towards either a settlement or trial.

Q4. Can I opt out of a class action lawsuit, and why would I want to? Yes, you can opt out of a class action lawsuit. You might choose to do this if you believe your individual damages significantly exceed what typical class members experienced, or if you have unique circumstances not addressed by the class action. Opting out preserves your right to file an individual lawsuit.

Q5. How is compensation distributed in a class action lawsuit? Compensation is typically distributed by a court-appointed claims administrator. The distribution method can vary, including claims-made processes, common fund divisions, or pro-rata adjustments based on the number of claims filed. Lead plaintiffs often receive larger payouts through “incentive awards” for their role in the case. The amount each class member receives depends on factors like the total settlement, number of claimants, and strength of individual claims.

References