The consumer class action lawsuit is one of the most effective tools consumers have to challenge unfair and deceptive business practices. The relatively small amount of damages involved in most consumer claims makes it extremely difficult, and in some cases impossible, for relief to be sought through individual lawsuits. Without the class action device, most consumers would have no realistic chance of recovering monies lost to large corporations or business entities through overreaching, deceptive or fraudulent tactics.
To pursue a class action, a group of individuals must demonstrate that they have similar injuries and common legal claims against a defendant, usually a corporation or other business entity. A class action is pursued by a lead plaintiff, also known as a class representative, on behalf of all persons who were similarly wronged by the defendant. If there is a recovery in a class action, either through a jury verdict or a settlement, individuals who are members of the class will share in the recovery.
Pursuing a lawsuit against a large corporation can be a lengthy and expensive-process. For that reason, the cost (in terms of both time and resources) and risk of bringing a lawsuit against a large powerful and well-funded corporation discourage many people from trying to protect their rights. Many consumers will simply decide to `Write off” their losses, rather than trying to recover their damages. A class action allows consumers to pool their resources, so claims of hundreds or thousands of similarly situated consumers can be pursued in a cost-effective way.
Although some lawyers and law firms have taken advantage of the class action device, in the right circumstances and with the appropriate case, the class action lawsuit remains an essential tool in the hands of consumers. In Texas and in many other states, there is close supervision of class action lawsuits from beginning to end to ensure that such lawsuits proceed in an efficient manner and in a way that is fair to all concerned. For instance, a judge must decide that a lawsuit is appropriate for class action treatment in that the case presents common facts and claims. Also, a judge must approve any proposed class action settlement to guarantee that the proposed settlement is fair to those who might be affected by the case.