As a well-established California business, you may have faced a few small legal matters over the years. Up until this point, you may not have had any major concerns about how a case could affect your company. Unfortunately, you and your business now face a more serious matter as multiple people feel that your company has wronged them.
When several people feel that a similar issue has caused them to suffer damages, they may band together to file a class action lawsuit. Understandably, you may worry about this type of lawsuit because it could mean that your company is on the line for paying restitution to multiple parties if the court does not rule in your favor.
When can parties file a class-action suit?
It is important to remember that class action lawsuits do not suit every legal matter in which multiple people are affected. The parties bringing the suit would have to petition the court for class action status. This status could seem more appealing to the court in some instances because it would allow the court to address a particular matter with one case rather than having to address each claim individually. Some reasons class action lawsuits come about include the following:
- Consumer fraud
- Securities fraud
- Defective products
- Dangerous products
- Employment issues
Often, the injuries suffered by one person may not be enough to pursue damages, but if the problem affected multiple people, they may feel as if they have a greater chance of receiving compensation if they work together as a class.
Who is in the class?
These cases often start with one person at the forefront who is considered the lead plaintiff. When a case receives class action status, a notice may go out to parties potentially affected by the issue named in the case. After receiving notice, individuals may choose to join the class. In some cases, parties may opt-out of joining, and in others, potential class members do not have a choice.
If your company recently had a class-action lawsuit filed against it, you certainly want to ensure that it is handled as best as possible. As a result, you may want to discuss your available legal options for addressing this type of predicament with your legal counsel. An experienced business law attorney could help you understand how a class action case could affect your company and how you can defend against claims.