Unbelievable Reasons Class Action Lawsuits Can Go Wrong

• Author: Natasha Herman
• Posted: 2024-10-09

Class action lawsuits allow many to band together and seek legal redress against companies or organizations that have wronged them. These lawsuits can provide a powerful tool for plaintiffs to seek justice and compensation for their losses. However, they can also be risky, and several common pitfalls can lead to an unsuccessful lawsuit depending on the case and the state's laws.
 

1. Lack of Class Certification

Sometimes, the court may not certify the class, meaning it doesn't decide that there is an established legal reason that all these particular people join together in one lawsuit. Moving forward with this type of action may be impossible in that case.

Lack of proper certification is like filing multiple individual claims against a wrongdoer, which can prove difficult and costly. Thus, having the right professionals fighting in your corner and being aware of how important class certification is before taking any steps forward can prevent much frustration and heartache if things go wrong.
 

2. Settlement Disputes

Settlement disputes can be difficult for all parties involved, especially pursuing class action lawsuits. They have hefty legal fees that can easily rise if the lengthy settlement dispute involves multiple parties. These costs can take money from the victims of the dispute initially litigated in court.

In addition, an extensive and complex settlement dispute could cause a class action lawsuit to fail. Furthermore, there is no hope of resolving the issue without all parties agreeing. To prevent these possible pitfalls, attorneys must use appropriate communication strategies to ensure all sides know their expectations before making any final decision.
 

3. Conflict of Interest

Class action lawsuits give individuals the means to defend their rights when many people have been wronged, but conflicts of interest can turn class action lawsuits into something that works against their goals instead.

Conflicts of interest arise when attorneys who will be rewarded more by settling out of court than going through the courtroom process represent a group in a class action lawsuit. The problem can become so severe that the value of each person in the group successfully recovering from the defendant is far less than expected.

Furthermore, these settlements lack transparency and accountability. You often cannot tell from where all the money is going as part of the settlement, or if it is larger than previously expected, how much this benefits each group member who was supposedly wronged. In effect, conflict of interest has sadly undermined one tool designed to create justice for those without other means to do so.
 

4. Statute of Limitations

The statute of limitations governs how long people have to file their claim and can lead to many people remaining out of the suit. For example, a class action lawsuit takes five years in court. In that case, any individual who suffered injury or financial loss after that date won't be able to gain from any potential settlement. As such, individuals must familiarize themselves with their legal rights regarding the statute of limitations and class action lawsuits to include everyone affected in the proceedings.
 

5. Inadequate Representation

Inadequate representation can have a debilitating effect on the successful outcome of a case; if one's legal team is not adequately prepared, misunderstandings or misrepresentations may arise that can reduce or eliminate any chance of success. When deciding to pursue justice through a class action lawsuit, choosing a reputable lawyer and creating a legal strategy with maximum chances of success is essential. Otherwise, you may face serious setbacks and be worse off than when you first started your suit.
 

6. Lack of Standing

Without standing, plaintiffs in a class action lawsuit must find other means of recourse, usually resulting in a bittersweet victory. In some cases, even though their claims are verified and can potentially award compensation and damages, plaintiffs can only realize their legal rights with each member being personally vested. Jurisdictions have adopted different interpretations regarding standing within class action lawsuits, providing common law and statutory remedies for various scenarios.
 

7. Dismissal for Failure to State a Claim

Dismissals for failure to state a claim can quickly derail class action lawsuits, leaving aggrieved individuals feeling powerless and frustrated. In most dismissal scenarios, the complaint brought forth by the plaintiff will contain causes of action that did not meet predetermined requirements to move forward with their class action lawsuit.

It mostly happens in complex litigations involving novel or untested legal issues, as courts aren't always sure how to address such claims. When dismissed, related problems that could potentially benefit entire classes of people remain unaddressed due to a lack of legal ground. Unfortunately, this issue of class action lawsuits being wrongfully dismissed for failure to state a claim is becoming more common.

Potential plaintiffs need to understand the risks and be aware of potential issues that may arise when initiating a class action lawsuit. It is also important to know the state's laws, which may vary depending on the case and jurisdiction. Consulting with a lawyer is always advisable when considering a class action lawsuit to overcome such challenges.