One of the biggest questions people who consider joining a class action lawsuit have is how much it’ll cost them. The answer can depend from case to case.
Schmidt & Clark lawyers have filed countless class action lawsuits during the two decades we’ve been practicing law. We’ve successfully helped our clients get damages due to them. Today, we’ll explain how much it will cost you to file a class action lawsuit.
Summary of the Key Findings
- Class actions are complex cases, and you should only hire outstanding lawyers.
- The plaintiff usually doesn’t have to pay anything for joining a class action claim.
- The court decides how the settlement is divided and approves the lawyer’s fees.
How Much Does a Class Action Lawsuit Cost?
A class action lawsuit doesn’t cost anything, i.e., it’s free to join. However, you should consider if you should join a class action or file an individual claim.
In some cases, individuals get notified of a pending class action lawsuit, and they are made aware of having a claim.
However, if your damages are greater than the losses of other participants in the class action lawsuit, you may consider not joining or opting out of class action and filing your own claim.
Keep in mind that if you’re a part of class action lawsuits, you won’t be able to pursue further legal action for the same cause once the class action is finished. This may limit the damages you get.
Class Representative and Class Action Lawsuit Expenses
A class representative is a victim of wrongdoing. This person hires a law firm and files the lawsuit. Class action lawyers represent the class representative. They must certify the claim in court and build a class of plaintiffs who suffered the same damages as the class representative.
The class representative represents all class members in court and during settlement negotiations. This is important because the class representative may have to pay certain fees related to the case, including legal fees and attorney's fees.
So, while it’s free for potential class members to join class action litigation, this isn’t the case with the class representative.
However, the standard practice is that the class representative will get reimbursed for the fees and court costs they paid during the class action when the case settles.
Does a Plaintiff Pay the Lawyer in a Class Action Lawsuit?
The plaintiff doesn’t pay a lawyer in a class action lawsuit. Normally, either the class representative or, more commonly, the law firm will cover all costs.
The plaintiffs don’t have to pay anything until the court awards the settlement.
Once the court awards the settlement, the lawyers will include all the costs incurred during a class action lawsuit in their fees. The lawyer’s fee will be deducted from the settlement at the end of the case.
The exact cost of claims differs with each case, depending on how long and complex the case is. Overall, class claims need significant financial investment.
The legal team has several disbursements — costs incurred before and after the class action lawsuit starts, such as:
- Perform independent research on the wrongdoings
- Obtain the evidence
- Obtain client records
- Consult expert witnesses
- Long-distance calls
- Courier charges
- Get class certification
- Present the case in court
Contingency Fee Basis
Another reason why plaintiffs don’t have to pay the attorneys is that the attorneys are paid on a contingency fee basis in the vast majority of class actions.
A contingency fee is when a lawyer is only paid if the class action is successful . The plaintiff won’t lose any money if class actions aren’t successful.
“In a contingent fee arrangement, the lawyer agrees to accept a fixed percentage (often one-third) of the recovery, which is the amount finally paid to the client.
If you win the case, the lawyer's fee comes out of the money awarded to you. If you lose, neither you nor the lawyer will get any money, but you will not be required to pay your attorney for the work done on the case.” American Bar Association
In most contingency fee class lawsuits, lawyers receive between 25% to 35% of the settlement. However, this can be higher due to higher legal costs in some complex cases.
Pro tip: Not all law firms have the resources to file class actions, so make sure you hire skilled and outstanding lawyers for your mass tort claim.
A coupon settlement is a kind of settlement class members can get when the mass torts are finished. This happens when the lead plaintiff and other class participants get a coupon, not a cash award. The coupon is usually worth a few dollars. This coupon is used as credit in future transitions with the defendant.
According to the Class Action Fairness Act, if this happens, the lawyers are usually paid cash fees above the award recovered by claim participants .
How is Money Divided in a Class Action Lawsuit?
The court divides the money in a class action lawsuit in most cases. This means the federal court determines how the court costs and attorney fees are to be paid.
As I mentioned, the attorney usually takes a percentage of the total sum awarded to the class representatives and claim members based on the contingency fee basis. Plus, they also take money for expenses incurred during the civil lawsuit.
Then, the money is divided between all plaintiffs. This ensures all participants joining a class action pay for legal fees, and the cost is shared.
However, in the US legal system, a judge can also rule that the defendant has to pay legal fees for the whole class. This usually happens when the settlement is small and isn’t enough to cover both the court and attorneys’ fees.
The Court Approves the Fees
The court divides the money but also approves the fees. Once the class action is filed, and a settlement is reached, the attorneys’ fees and court costs are decided first. Lawyers are under an ethical obligation to only have fair and reasonable fees.
The court has to approve all attorneys’ fees and also related class action costs. The court can reject the attorney’s fees if they are deemed to be too high. This usually happens when the settlement and the lawyer’s fees are too disproportionate compared to the money the plaintiff will end up getting.
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How do you start a class action lawsuit?
You start a class action lawsuit by finding a personal injury lawyer who files a court claim. The lawyer has to ask the court to certify the potential members as being their own class, so other plaintiffs can join the lawsuit.
Is there a downside to joining a class action?
Yes, there’s a downside to joining a class action. If you lose, you won’t get any damages, and you won’t be able to file the claim again. Plus, class action lawsuit costs can be high, especially if you have to pay the fees yourself.
Hire an Experienced Attorney to Help You With Class Action Lawsuits
Class actions are complex cases that require a lot of work on the lawyer's part. However, by joining a class action, you stand to gain compensation for the wrongdoings done to you.
The most important thing is to hire a professional attorney who’s dealt with class claims before.
Schmidt & Clark lawyers have won countless mass torts. Our lawyers know how to obtain a class action certification, perform independent research, and present the claim in court.
Contact us today for a free consultation, and we’ll explain the class action lawsuit cost, as well as your chances of winning the claim.