You may have received a postcard in the mail at some point, letting you know that you are part of a potential class action lawsuit. Or, perhaps you have heard about large multimillion-dollar lawsuits that forced corporations to pay heavy judgments for various types of wrongdoing, such as consumer fraud, junk fees, defective products, recalled products, car / truck defects, and so forth. Many of these lawsuits that take on such powerful corporations are made through class action lawsuits.

In a class action lawsuit, a “class” is formed by many individuals who have very similar claims to make against a defendant. These individuals may have all suffered injury due to the same product, or all experienced some form of discrimination from the same company. Instead of separately pursuing compensation for these harms, the members of the class all become part of one lawsuit.

Class actions usually start with a single injured person approaching a lawyer about pursuing compensation. If the lawyer realizes that many other people have likely suffered an injury due to the same cause as their client, they may attempt to initiate a class action lawsuit. The lawyer will investigate and present a potential class of victims to be certified by a court. Once the class is certified, all proposed injured parties are added to the class unless they opt out.

If the class action lawsuit is successful, all members of the class will receive compensation from the defendant. The method of dividing compensation varies from case to case.