What’s the Difference Between a Class Action and Individual Lawsuit?

January 12, 2023

A class action lawsuit is a special kind of lawsuit. Instead of one or a few people suing a defendant, a class action lawsuit involves a large group of people joining together to file suit. By filing a class action instead of a personal lawsuit, people are able to share the costs of a lawsuit. But, they may give up some of the benefits of individual lawsuits. 

Before deciding what type of lawsuit would best fit your claims, you should consider the key differences between the two types. Also, you need to compare the benefits and drawbacks of each.

Class Action vs. Individual Lawsuit: Key Differences

To understand the key differences between a class action lawsuit versus an individual lawsuit, the best place to start is to ask what is a class action lawsuit? A class action is a way for numerous individuals to band together to sue one or a few defendants.

Whether you file your class action in federal or state court, however, special rules apply to class action lawsuits that do not apply to individual suits. Individual members of the class action lawsuit do not have the same decision-making power as plaintiffs in an individual suit.

Individual Plaintiff or Class of Plaintiffs

An individual who files suit against a defendant is called a plaintiff. In an individual lawsuit, there are usually only one or a few plaintiffs. 

In a class action lawsuit, however, there are a large number of plaintiffs, called the class. The class includes the initial group of plaintiffs who began the litigation, of whom only a few are actually named in the lawsuit. These are usually called the named plaintiffs or class representatives, as well as anyone else who is similarly situated. Similarly situated means people who have suffered a similar injury caused by the same defendants as the original group of plaintiffs.

Litigation Process and Rules

Whether you file suit in federal or state court, a class action is governed by special procedural rules in addition to or sometimes instead of the rules that apply to individual lawsuits. Many of the rules involve a court-approval requirement, beginning with determining if you meet the criteria for class action lawsuits, a process called class certification. 

Other rules may include court appointment of the class' legal counsel, notice requirements to potential or other class members, opt-out or opt-in rights for potential class members, and court approval for settlements, among others. 

1. Class Certification. The biggest hurdle in filing a class action begins with a motion for class certification. For a class to be certified in federal court, for example, the court must decide there are so many potential members of the class that joining them all as named plaintiffs in individual suits would be very difficult. 

The court must also determine that class representatives will be able to represent the interests of the entire class. If a court agrees that the class has met these criteria, plus a few more, then the court will certify the class. No such requirement exists in an individual lawsuit.

2. Court Appointment of Legal Counsel. In an individual suit, the plaintiffs have the power to choose their own attorneys without consulting the court. 

In a class action, however, the court appoints the legal counsel that represents the class.

3. Notice Requirements. From notifying potential class members of the class that a class action has been filed and giving them opt-in or opt-out rights to notifying class members of a settlement, notice requirements in a class action can be challenging. 

These notice requirements are different from the typical notice requirements in an individual lawsuit.

4. Court Approval of Settlements. In most individual lawsuits, courts do not need to approve settlements reached between the plaintiff and defendant. 

Instead, in many cases, the plaintiff typically just needs to dismiss the suit against the defendant and the court is not informed of the settlement terms. However, a court must approve the terms of a class action settlement.

Decision-Making Power of Plaintiffs

In individual litigation, the plaintiff makes all the decisions about the litigation, from whether to hire an expert witness and who to hire to whether to accept a settlement offer. 

In a class action, most class members do not get any decision-making power other than deciding whether to opt in or out of the class. Instead, the class representatives make most of the decisions. 

But, the court-approval requirement for class action settlements helps to protect the interests of the entire class.

Pros and Pitfalls

When deciding between a class action lawsuit versus individual lawsuit, consider the benefits and drawbacks of each. Deciding whether class action litigation is best for your case depends on a number of factors.

Individual Claims

Filing an individual lawsuit is the simplest route. Individual litigation with a single plaintiff involves no special procedural hurdles, no need to find a specialized class-action attorney, and no sharing decisions or splitting the settlement or judgment. It also usually has a quicker turnaround from filing to resolution.

However, filing a lawsuit can cost a lot of money. Costs can rack up with filing fees, attorneys' fees, and expert witnesses fees. If the amount you could recover in damages for the injury you suffered is not very much, it might not make sense to file a separate lawsuit. 

You could end up spending more in litigation costs than any judgment or settlement you receive, especially if you need an expert witness to prove your claims. 

Class Claims

With a class action lawsuit, you can pool your claims and anticipate a larger judgment or settlement amount. From that total amount, you will have more resources to pay filing fees, retain the most appropriate attorneys for your claim, and hire the right expert witnesses. This makes success much more likely than filing separate lawsuits. And this is especially true if you need specialized expert witnesses.

On the other hand, you will have to divide your award between a large group of people and you lose some of your decision-making power. Because of the procedural hurdles in a class action, the turnaround time from filing to either judgment or settlement may be much longer for a class action lawsuit vs an individual lawsuit.  

Reach Out to a Class Action Attorney Today

An experienced class action attorney can help you decide whether a class action is right for you. Contact a specialized class action attorney at McEldrew Purtell to find out more.