Austin Business Attorney

Business Litigation Center - Class Actions

In a class action, a large group of similarly situated plaintiffs sues with one or a few plaintiffs serving as representatives of the group. The plaintiffs can be individuals or business entities. When many plaintiffs have very similar claims, the class action is efficient for them, the defendants, and the court because it consolidates what would otherwise be hundreds or thousands of individual cases into one. Common subjects of class actions are dangerous products and securities fraud. If you feel that you may share a common complaint with many other plaintiffs, you should consult with a trial lawyer to determine whether your case could be brought as a class action.

Class actions begin, like any other lawsuit, with the filing of a petition by the plaintiffs. Concurrently with the petition or soon after it, the plaintiffs must file a motion to certify the group of plaintiffs as a class for a proper class action. The court considers whether the case meets the statutorily specified prerequisites and characteristics for being tried as a class action, and the case cannot be tried as a class action without the court's certification.

The plaintiffs also must notify the public, via direct mailing, newspaper ads, or other means, in order to inform potential class members of the suit and to allow them the opportunity to opt in or opt out of the suit. If an eligible potential class member opts out of the class action, she will not share in any award that is obtained, but she preserves her right to sue individually later. Conversely, plaintiffs who are included in the class share in the award, but they lose the opportunity to sue later on their own.

Securities Class Actions

Class actions alleging securities fraud have been increasingly common and successful in recent years. The typical securities class action is a suit against a company that has caused a particular corporation's or fund's stock to become artificially inflated. Fraudulent inflations can cause hundreds or thousands of investors to lose money because the stock eventually deflates. All of the investors who lose money as a result of a fraudulently induced inflation are potential class members in a securities fraud class action. The investors can be individuals or businesses.

Legal Fees

Most often, lawyers representing plaintiffs in class actions charge a contingency fee. In a contingency fee arrangement, a lawyer agrees that he or she will only be paid if the plaintiffs collect money, and the lawyer takes an agreed percentage of the amount collected. This arrangement is beneficial for the clients because they do not incur risks in paying litigation costs and there is a great incentive for the lawyer to win the case.

Summary

If your think that your business is one of many victims of an act of fraud or another wrongful act, a class action might be the most effective means of getting compensated. Class actions are an especially complicated type of litigation. For more information about whether your situation could be the grounds for a class action, consult a knowledgeable Austin business attorney.

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