What are the benefits and drawbacks of class action lawsuits?

| May 12, 2021 | Class Action Lawsuits, Consumer Fraud |

Class action lawsuits are a procedural device that lets one (or multiple) plaintiffs file a lawsuit. They can then prosecute a lawsuit for a larger group on a whole, which is a “class”. This is a common legal device, but one that still suffers from many misunderstandings.

On top of that, class action lawsuits do not always provide the largest benefit. There are potential drawbacks to consider, too. But what are they?

The pros of class action lawsuits

The Balance looks into both sides of class action lawsuits. On the upside, these lawsuits provide a great benefit to the court system as a whole by keeping numerous similar cases from clogging up the system. The courts face a constant backlog, so they appreciate anything that helps them reduce this.

It helps you, too, in that it reduces the overall cost of litigation. You also gain consistent treatment across the board for everyone facing the purported issue, since the final verdict applies to all participants in the lawsuit equally. It also provides incentive for defendants to settle due to the sheer number of plaintiffs they face. Finally, it provides restitution for any plaintiff who would not otherwise receive anything due to the cost of facing litigation alone.

The potential downsides

But there are downsides, too. For one, it takes a long time to settle these cases because of the complex legal process behind them. Attorneys can also earn much more than plaintiffs. Members in the class also cede control they have over the suit to the lead plaintiff along with their attorney, which takes the matter out of their hands entirely. The legal representation also has a huge impact, since one bad attorney can mess up the case for the entire class.

You might receive rebate or coupons instead of cash, which some find useless. Finally, by participating in a class action lawsuit, you give up any right to sue independently. You must weigh these options carefully before making your choice.