When should I opt out of a class action case?
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Mary Martin
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Mary Martin has been a legal writer and editor for over 20 years, responsible for ensuring that content is straightforward, correct, and helpful for the consumer. In addition, she worked on writing monthly newsletter columns for media, lawyers, and consumers. Ms. Martin also has experience with internal staff and HR operations. Mary was employed for almost 30 years by the nationwide legal publi...
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UPDATED: Jul 19, 2023
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UPDATED: Jul 19, 2023
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.
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Joining or opting out of a class action lawsuit can be a costly decision. The benefits and risks of one option over the other depend heavily on the type of lawsuit and a person’s situation. Therefore, an individual should weigh the pros and cons of a class action suit before making a decision.
Common Class Actions
Many class actions are consumer protection suits, such as a software company forcing buyers to agree to certain restrictions with giving them proper information about those restrictions. In this case, the point of the lawsuit is to get the company to change its behavior and not necessarily to repay each buyer for any harm done. These types of suits are often posted publicly or noticed via mail or in retail stores. There can be thousands of litigants.
Most people would not think of filing a lawsuit on their own, but could benefit from staying in the class in the form of some small payment. If the amount a person would receive by suing individually is so small it wouldn’t warrant the expense of filing a lawsuit, then it wouldn’t make sense to pay the small claims fee to file the suit. In this type of suit, it is easier to stay in the class action.
That is the general advice about deciding whether to opt out or stay in. If a person has only been harmed in a small amount, it makes more sense to litigate in a class action. If a person has a specific injury or his loss is substantial, then opting out might be the best option.
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Cost and Benefits of Class Action Lawsuit
The valuation of a case includes the amount of any loss or damages along with the costs of litigation, including attorney’s fees. Because class action damages are divided into many parts after legal fees, the class amount may not be enough to cover an individual’s loss.
A person’s situation or interests may be significantly different from the rest of the class. An example may be a class action that involves an automobile defect, such as tail lights that are a fire hazard. While other class members may have had minor fires and damage related to the defect, if a person’s car was destroyed or someone physically injured because of the defect, then opting out makes sense.
If a person has a reason to believe the lead plaintiffs and lead counsel for the class do not have his best interests at heart, or disagrees with the strategy, then staying in the suit may not be the right decision. If an individual want to play an active role in the case or want a certain level of control over the potential outcomes, this is another good reason for opting out.
Consult an Attorney
Before opting out, a person should consult with an experienced class action attorney. The decision to stay in or leave a class action involves more than checking a box on a card or calling plaintiff’s counsel. There are filing requirements and deadlines that will need to be met. In some cases there may be an applicable statute of limitations. It is an important to analyze all the procedural requirements along with personal reasons before making a decision about any legal action.
Case Studies: Opting Out of Class Action Lawsuits
Case Study 1: John’s Software Restriction Lawsuit
John was one of many buyers affected by a software company’s undisclosed restrictions. Staying in the class action might result in a small payment, considering the expense of an individual lawsuit.
Case Study 2: Sarah’s Devastating Car Defect
Sarah’s car was destroyed due to a hazardous defect, while others experienced minor damage. Opting out allows Sarah to pursue her specific injuries outside the class action.
Case Study 3: Mark’s Disagreement With Class Counsel
Mark disagrees with the class counsel’s strategy and feels his interests aren’t represented. Opting out gives Mark the opportunity to actively participate and have more control over the outcome.
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Mary Martin
Published Legal Expert
Mary Martin has been a legal writer and editor for over 20 years, responsible for ensuring that content is straightforward, correct, and helpful for the consumer. In addition, she worked on writing monthly newsletter columns for media, lawyers, and consumers. Ms. Martin also has experience with internal staff and HR operations. Mary was employed for almost 30 years by the nationwide legal publi...
Published Legal Expert
Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.