Is there any risk to joining a class action lawsuit?
Asked by: Korbin Beatty | Last update: December 5, 2025Score: 4.1/5 (22 votes)
Joining a class action lawsuit can reduce individual control over case decisions and may result in smaller compensation than an individual suit. Additionally, class actions are often lengthy, with potential restrictions on pursuing future individual claims for the same issue.
Is it worth joining a class action lawsuit?
Even in cases with minor damages, it may be worth your time, money, and resources to join a class action lawsuit. If you have minor injuries or other damages from a large company's negligence, these issues can affect many other people, too.
What are the disadvantages of joining a class action?
Some of the common disadvantages of class action lawsuits include: Lack of decision making control. Class action lawsuits are, by definition, representative rather than group litigation. That means that representatives of the affected class make the important litigation decisions – including when to settle.
Will my employer know if I join a class action lawsuit?
Your potential future employers are unlikely to know that you participated in a class action suit against your former employer unless you tell them. If a prospective employer does somehow become aware of your involvement in this suit, they should not discriminate against you for enforcing your rights.
How serious is a class action lawsuit?
Class-action lawsuits are an important and valuable part of the legal system when they permit the fair and efficient resolution of legitimate claims of numerous parties by allowing the claims to be aggregated into a single action against a defendant that has allegedly caused harm.
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Who usually wins in a class action lawsuit?
The lead class plaintiff or plaintiffs typically receive a more significant share of a class settlement. The reason is that the lead plaintiff does most of the work before, during, and after legal proceedings, playing an active role in hearings, trials, and other court proceedings.
What does it mean to join a class action lawsuit?
Class action lawsuits are designed to help many people join together to seek compensation for small individual damages. So, it's crucial that other people were also harmed by the same set of circumstances and the same party for a class action lawsuit to be possible.
Can a company fire you for joining a class action lawsuit?
No, it is illegal to terminate someone's employment for participating in a class action suit. Federal law protects you against retaliation by your employer.
Does a class action lawsuit count as income?
Generally, settlement funds and damages received from a lawsuit are taxable income according to the IRS.
Should I opt out of a class action lawsuit?
When Should I Opt Out of a Class Action Lawsuit? You might want to opt out of a class action lawsuit if you suffered serious injuries, more than most members of the class. In that case, filing an individual claim might be the most reasonable thing.
How much does a class action lawsuit cost?
The courts often determine how much lawyers will get in fees from a successful class action lawsuit. This figure is usually around 25% to 35% of the total settlement amount awarded to the class of plaintiffs. However, the fees can be higher if the case is unusually complex.
How long does a class action lawsuit take?
Some class action lawsuits can take as little as a few months and as long as several years. These kinds of cases can typically take around two or three years to be resolved, while others can take even longer. When court rulings are appealed, the process gets further prolonged.
What happens if you ignore a class action lawsuit?
In most instances, if you don't claim the funds, the money goes into a charitable fund. Johns, Flaherty & Collins worked on a class-action suit in which unclaimed settlement proceeds went to a shelter for battered women and children.
Does the person who starts a class action lawsuit get more money?
Lead plaintiffs sometimes receive a higher percentage of class settlements as part of their compensation package or as an 'incentive' award than other class members. This award structure compensates lead plaintiffs for their time and their effort.
What to do if you receive a class action notice?
If the lawsuit has not yet resolved – the notice is just alerting you to the litigation – you generally don't have to do anything at this point, unless you want to opt out. If the case later settles in consumers' favor, you may receive an additional notice in the mail informing you that a settlement has been reached.
Does everyone get the same amount of money in a class action lawsuit?
Class action lawsuit settlements are not divided evenly. Some plaintiffs will be awarded a larger percent while others receive smaller settlements. There are legitimate reasons for class members receiving smaller payouts.
Can the IRS take money from a lawsuit settlement?
The IRS can only pursue those portions of the settlement not intended as reimbursement for property loss or physical injury. So, while this may not always happen, it is possible that the IRS might take at least some of your personal injury settlement.
Can a settlement check be direct deposited?
Once your attorney receives your settlement check, direct deposit is an option, but that doesn't mean you'll see the cash in your account right away. However, you can still get cash to pay for medical bills and living expenses. You can receive a portion of future settlement proceeds via pre-settlement funding.
What happens if you participate in a class action lawsuit?
Although joining together in a class action can be powerful, plaintiffs risk receiving a smaller individual payout if the award is distributed among many people. They may also lose their ability to bring an independent lawsuit if they are unhappy with the outcome.
Can a lawsuit affect future employment?
In California, certain laws provide some degree of protection against employment discrimination based on one's involvement in litigation. Consulting with a legal team can help you to fully understand your rights and how best to protect future job prospects given your unique circumstances.
Is it better to join a class action lawsuit?
If you sue your employer for small amounts, the cost of litigation could be higher than the amount of your damages. However, a class action lawsuit can reduce expenses for all class members. In addition, it can make bringing smaller claims more cost-effective so that an employer's wrongful acts do not go unpunished.
How much does it cost to join a class action lawsuit?
It costs nothing to join a class action lawsuit. However, in some cases, a person may opt-out of a class action because they feel they can recover more of their damages if they file an individual case.
Can you remove yourself from a class action lawsuit?
To exclude yourself from a class action lawsuit, you must follow the instructions in the class action notice that explain how to opt out. You'll need to submit a written opt-out request via the mail or electronically by email or an online portal.
How long does it take to get money from a class action lawsuit?
If you settle a class-action lawsuit, you could receive compensation within a year. However, keep in mind that this is only an estimate. Some cases take much less time, but you may wait much longer for a resolution in other situations.