Should i Play a fabulous Class Action Lawsuit?.

You might have read recently concerning the ‘class action lawsuit’ being brought against a significant telecommunications company in Australia. It’s claimed that nearly 18,000 of the company’s customers (and also some dealers) have joined the lawsuit, which arises from allegations of poor network performance.

One of the problems facing an aggrieved customer, is the economics of bringing legal action. Also, the financial loss arising from a slow or unreliable network is frequently difficult to quantify in dollar terms suffered losses in Credit Suisse stock. If the impact is too serious, affected customers may vote using their feet, but changing networks is generally inconvenient, and terminating the first service may involve a penalty cost… insufficient to justify the legal fees to take the situation to court, but certainly enough to make disgruntled customers see red. Although modern consumer legislation encourages large utility companies to generally meet minimum standards of customer service, the practical the truth is that individual consumers remain relatively powerless.

This really is where the right to bring a type action serves a valuable role, by allowing the claims of numerous affected customers to be consolidated into one lawsuit, reducing the legal costs payable by every individual class member, and also steering clear of the impact of numerous similar claims clogging up the court system. This concept of group litigation isn’t a modern development, and in reality was very common in the 13th and 14th centuries in medieval England.

However, to participate in a type action, each participating member must contribute financially, or enter into a litigation funding agreement. Although the outcome may exceed financial contributions, that’s not guaranteed. If the lawsuit is unsuccessful, the contributions is likely to be lost and there’s a threat of members needing to contribute additional sums towards any adverse costs order – that’s, where the class action fails, and the plaintiff (the person representing the class members) is ordered to generally meet some of the defendant’s legal costs.

Once a type member has signed around participate in a type action, they could have very little say in the decisions made on the behalf. Although class members can decide not to accept the class settlement, that option is, for many individuals, a Hobson’s choice… the member who opts out will need to pursue his / her claim independently.

Another recent class action lawsuit, commenced in July 2009, was brought against certainly one of Australia’s largest banks on behalf of individual investors who lost money after a financial broking company collapsed. Those investors allege the lender was partially or wholly responsible for their losses. A youthful, threatened action, also against exactly the same bank but involving an alternative representative, generated a settlement for around 2,000 investors, but other investors are continuing their group action from the bank.

Further class actions, also arising from the broking company’s collapse, have been commenced against a bank in Queensland, Australia, and from the manager of two franchise stores associated with that bank.

These lawsuits illustrate the advantages and disadvantages of class action proceedings. Oftentimes, the sheer weight of numbers encourages a negotiated settlement, while the defendants in these cases are also anxious to prevent unrecoverable legal costs and the damage with their reputations from prolonged publicity. Although negotiated outcomes may be much less compared to the sums claimed, for all members the settlement will represent an outcome that could not otherwise be afforded. Also, as is the case with court proceedings generally, lengthy delays are nearly inevitable unless an early on settlement is reached.

In the very first case, relating to the telecommunications company, it is alleged by some customers that call reception issues generated the loss of work opportunities, while affected business customers say they’ve suffered reduced trading as a consequence of poor network performance. Now, exactly the same company has been embroiled in a new situation where it is alleged that personal information all the way to 4 million customers surely could be improperly accessed by individuals outside the company. Customers affected by this privacy breach may be able to interact a separate class action against the company, or all the claims may be combined in a single action.

In any event, the company’s woes appear apt to be front page news for some time yet.

If you’re asked to join a type action, consider obtaining legal counsel about alternative options to address your specific loss or problem, and to receive independent advice concerning the merits of the proposed class action lawsuit.

Note: This short article is primarily about class actions in Australia. The general principles may be relevant to some other jurisdictions, but you will see significant differences in the applicable rules and procedures.