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How Do Class Action Settlements Work?

Published: Nov 30, 2016 in Mass Action, Personal Injury

Recently it was announced that Volkswagen agreed to one of the largest class action settlements in history due to emissions issues with its diesel engines. The settlement will total approximately $14.7 billion and affects 475,000 class members. Another recent class action settlement resulted in Apple paying consumers $400 million because of price fixing on e-books.

The number of people affected and the amounts paid out in class action settlements can be massive. Chances are you’ve received notice at one time or another that you are eligible to participate in a class action settlement. While the notices you receive regarding a class action settlement are often difficult to understand, the way class action settlements work is generally very straightforward.

Class Action Lawsuits

A class action is a lawsuit that combines the claims of a large group of individuals who have all been subjected to the same or similar harm by the defendants. Instead of each plaintiff filing an individual lawsuit against the defendants there is one plaintiff who files a class action lawsuit on behalf of all of the plaintiffs.

For example, someone who purchases a defective product could end up being the plaintiff in a class action lawsuit as the representative for all the other consumers who purchased the same defective product. Class action lawsuits prevent individual cases from clogging the courts and allow claimants without the financial resources to take on a large corporation by themselves the ability to pursue their rights as a group.

Class Action Settlements

As evidenced by the Volkswagen and Apple settlements, defendants often seek a settlement in a class action lawsuit because the amounts involved are too substantial to risk a trial. However, because the lawsuit represents an entire class of plaintiffs the settlement must take into account the interests of the entire class and not just the individual plaintiff. The settlement must then be approved by the court to ensure that the interests of all the claimants are protected.

In Illinois, for a class action settlement to be approved by the court, it must be fair, reasonable, and in the best interest of the class. The most important factor in determining the fairness of a settlement is the strength of the claim as compared to the settlement offer. The standards of review are similar for class actions filed in federal court.

Settlement Notices

Once a class action settlement is approved by the court, notice of the settlement must then be sent to all of the members of the class. The content and method of notifying all of the class members will vary depending on the case and the terms of the settlement. That is why you may see settlement notices through mail, email, or simply published in the newspaper or online. However, the settlement notice must inform the claimants of their right to opt out of the settlement and give the claimants a procedure for opting out. The settlement notice often also provides information about procedures the claimants must follow to obtain settlement proceeds.

How Our Belleville Class Action Lawyers Can Help You

Class action lawsuits can be complex and confusing. If you believe you have suffered harm that may have also affected numerous other individuals, you may have a class action, and we can help you pursue a case on behalf of yourself individually, as well as the class as a whole. A class action lawyer at The Cates Law Firm, LLC can help you navigate this complex area of the law and will seek justice to right the wrongs caused to you and many at the hands of a large corporation.

We offer a free consultation and charge no upfront fees when you hire us to represent you. To schedule an appointment with one of our lawyers, contact us at (618) 767-6293 or use our online form to find out how we can help you.