Class action settlements or verdicts affect a lot of people and, often, many businesses. Of course, all of the plaintiff class members and defendants in a single class action lawsuit are affected but, so too is the future of the defendant’s business, the business of similarly situated businesses, and often many members of the American public.
Looking Back on Past Class Action Trends and the Changes They Created
Class action litigation has a long history of changing the way businesses do business and of protecting the rights of all Americans. In the 1950s and 1960s, several class action lawsuits were primarily responsible for racial desegregation in the United States. The 1954 class action decision of Brown v. Board of Education which prohibited racial segregation in schools, is arguably one of the most famous and important decisions reached by the United States Supreme Court. By the 1980s, the courts were hearing many class action cases about defective products including asbestos. Since those class action cases, the use of asbestos has been tightly regulated in the United States. Today, class action lawsuits are often brought because of defective products, to protect people’s rights, and to protect the environment.
The Effect of Class Actions on Individual Businesses
Individual defendants and businesses that are similar to those defendants are greatly affected by class action lawsuit outcomes. Class action verdicts can be expensive for defendants. In order to prevent future litigation, defendants often make broad changes to their procedures, policies, or products to make sure that their entire business complies with the class action decision because it less expensive to make the changes than to risk future litigation. Similar businesses, government agencies, or groups very often follow suit for the same reason.
The Effect of Class Actions on the Law
Furthermore, class action lawsuits often have an important impact on the law for two important reasons. First, settlements in class action lawsuits must be approved by the court after a judge issues a written determination that the settlement is fair. Additionally, class action settlements are often available as public information. Individual lawsuit settlements typically do not have detailed written approvals by the court and are often confidential, thus not making them valuable precedent. Second, class action lawsuits are often well funded because the costs of litigation are dispersed among all of the class members and defended by big companies or the government. Thus, class action lawsuits that are litigated are often appealed to the final stage and the finality of the class action decision is well respected.
For these reasons, class action settlements and verdicts often have a significant impact on the law.
What Effect Will Your Class Action Lawsuit Have?
That question is different for every class involved in a lawsuit. Class members, and their attorneys, are often concerned with the effect of a settlement on the future business of the defendants, businesses that are similar to the defendants, and on the law. The individual compensation for most of the class members in the majority of class action lawsuits is not typically enough to motivate an individual to take action. However, in many cases the larger picture benefits such as safer products, racial integration, fairer securities trading, or a cleaner environment are enough to motivate class members to bring a class action lawsuit to a fair and just resolution.
The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.