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Class Actions

The last time that I wrote in this column it was about how the legal system itself is geared toward settlement of issues between parties without going to trial. This fact, I suggested, reduces litigation time and expense, and ultimately cost to the parties. There are approaches to litigation, however, that can be adopted by litigants themselves that aim toward cost reduction, if they share a common legal problem. One such approach is the class action. As you may have heard in the local news recently, a class action has been undertaken in Caledonia by the business community there. A big benefit to the class action is that the cost is spread out over (usually) many people who share the common legal problem. The first step is to certify the action as a class action. There are five criteria that must be met before a judge will certify it. There must be a legitimate legal basis for the suit; there must be two or more people in the class; the action must raise common issues; a class process must be better than individual processes for whatever reason; and, a representative plaintiff must be identified who has experienced the same or similar legal problem as the others in the class, such as airplane crash where many people suffer damages from that event. Once the class action is certified, all potential members of the class must be notified somehow. Importantly, all potential class members are deemed to be part of the class action lawsuit unless they actively opt out of it. The legal case is based on the experience of the representative plaintiff and that plaintiff is the party who goes through the various processes (e.g., discovery, examination as witness, etc.) leading up to, and during a trial. If the class wins its suit, damages are awarded to the class, not just to the individual representative plaintiff, based on the numbers in the class. The distribution of the damage among class members depends on many factors and can be an equal distribution, or, a pro-rated distribution depending on the amount of damage suffered by an individual within the class. Much of the cost of carrying the class action is borne by the law firm representing the class. The law firm is paid for its work, if successful, based on several factors and the final fee must be approved by the court. Should you have any questions for Ask A Lawyer, please direct them to the Simcoe Reformer or ask a lawyer of your choice.