How Is Money Divided in a Class Action Lawsuit?
A class action lawsuit allows many people injured in the same way to participate in litigation to recover economic and non-economic damages. One or more victims file the lawsuit as the plaintiffs. They represent the larger “class” of victims injured and harmed by the defendants. Thousands of people may be members of a class action lawsuit. State law governs class action lawsuits filed within a state.
After the court approves a class action settlement, the funds are distributed. Most personal injury lawyers take class action lawsuits for a contingency fee. Therefore, they receive a percentage of the settlement funds as their attorneys’ fees. The law firm is reimbursed for the costs of the case from the settlement proceeds.
The remaining money received for a class action lawsuit settlement is divided among the plaintiffs and the class members. Many factors impact how the proceeds of a class action lawsuit are paid to the participants.
How Are the Proceeds of a Class Action Lawsuit Divided Among the Plaintiffs and Class Members?
The payout for a class action lawsuit depends on the settlement agreement. Most settlements are paid in a lump sum payment. However, some cases may result in structured payments over time.
The lead plaintiffs often receive the largest payments because they filed and participated in the lawsuit. They usually have severe injuries and significant damage. The class members receive payouts based on their injuries and damages. The settlements may not be divided equally.
Factors that impact how much you might receive for a class action lawsuit include:
- The number of lead plaintiffs
- The total number of class members
- The severity of your injuries and losses
- The cost of litigating the class action lawsuit
- The strength of the evidence proving the claim
You may not receive a large settlement if your injuries and losses are minor. Class members who sustained traumatic injuries may receive larger settlements.
Before a settlement receives final court approval, the court holds a hearing to ensure the class members agree with what has happened in the case to date. You should receive notice of the hearing. If you object to the proposed settlement, you must notify the court of your objections.
The judge decides whether objections to the settlement have merit. If so, the matter is addressed. If not, the objection is dismissed, and the settlement moves forward.
Are There Advantages of Joining a Class Action Lawsuit?
Class action lawsuits often involve complicated matters and high-profile defendants. Filing a class action lawsuit makes pursuing these types of claims efficient and easier for the class members. Advantages of a class action lawsuit for class members include:
- Minor injuries are included: Sometimes, a person may experience a minor injury because of another party’s negligence or wrongdoing. It may not be cost-effective to pursue a lawsuit for a minor injury. However, in a class action lawsuit, you can file a claim and receive compensation based on your damages.
- No out-of-pocket costs: You are not required to pay legal fees, costs, and out-of-pocket expenses for the case to join a class action lawsuit. Those costs are deducted from the settlement or jury verdict. Furthermore, the costs are spread out among all plaintiffs and class members, so you are not bearing the full burden of these costs.
- Encourages settlement: Some class action lawsuits go to trial. However, many cases are settled through negotiations and mediation. Defendants may not want to take the case to trial because of the strength of thousands of claimants alleging the defendants caused them harm.
- No stress for class members: There is not much you need to do in a class action lawsuit. Class members have a passive role in the case because the lead plaintiffs represent the interest of the group. You may need to respond to a request to join or opt out of the class action lawsuit. Depending on the type of case, you may be asked to provide proof you sustained a loss associated with the case.
In conclusion, joining a class action lawsuit can provide significant advantages, such as minimizing costs, reducing stress, and allowing individuals to seek compensation for minor injuries that may otherwise be too costly to pursue on their own.
Contact the Alabama Personal Injury Attorneys at Belt, Bruner & Barnett Personal Injury Lawyers. Call us at (205) 206-5088
The legal wording of notices for class action lawsuits can be confusing. In some situations, an injured party could benefit more by filing an individual lawsuit. To protect your interests, you should consider consulting with a Birmingham personal injury lawyer as soon as possible.
Contact an experienced personal injury lawyer at Belt, Bruner & Barnett Personal Injury Lawyers to schedule a free initial consultation today. We serve Shelby County, Madison County, Montgomery County in Alabama, and its surrounding areas.
We are located in Birmingham, Huntsville & Montgomery.
Belt, Bruner & Barnett Personal Injury Lawyers – Birmingham Office
880 Montclair Road, Ste 300,
Birmingham, AL 35213
(205) 206-5088
Belt, Bruner & Barnett Personal Injury Lawyers – Huntsville Office
116 Jefferson St. Suite 207
Hunstville, AL, 35801
(256) 666-4660
Belt, Bruner & Barnett Personal Injury Lawyers – Montgomery Office
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Montgomery, AL 36104
(334) 513-2110