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A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of
lawsuit A lawsuit is a proceeding by a party or parties against another in the civil Civil may refer to: *Civic virtue, or civility *Civil action, or lawsuit *Civil affairs *Civil and political rights *Civil disobedience *Civil engineering *Civil ...
where one of the parties is a group of people who are represented collectively by a member or members of that group. The class action originated in the United States and is still predominantly a U.S. phenomenon, but Canada, as well as several European countries with
civil law Civil law may refer to: * Civil law (common law) Civil law is a major branch of the law.Glanville Williams. ''Learning the Law''. Eleventh Edition. Stevens. 1982. p. 2. In common law legal systems such as England and Wales and the law of the United ...
, have made changes in recent years to allow consumer organizations to bring claims on behalf of consumers.


Description

In a typical class action, a plaintiff sues a defendant or a number of defendants on behalf of a group, or class, of absent parties. This differs from a traditional lawsuit, where one party sues another party, and all of the parties are present in court. Although standards differ between states and countries, class actions are most common where the allegations usually involve at least 40 people who the same defendant has injured in the same way. Instead of each damaged person bringing his or her own lawsuit, the class action allows all the claims of all class members—whether they know they have been damaged or not—to be resolved in a single proceeding through the efforts of the representative plaintiff(s) and appointed class counsel.


History


England

The antecedent of the class action was what modern observers call "group litigation," which appears to have been quite common in
medieval England England in the Middle Ages concerns the history of England The British Isles became inhabited more than 800,000 years ago, as the discovery of stone tools and footprints at Happisburgh in Norfolk has indicated.; "Earliest footprints outside ...
from about 1200 onward. These lawsuits involved groups of people either suing or being sued in actions at
common law In law, common law (also known as judicial precedent or judge-made law, or case law Case law is the collection of past legal decisions written by courts and similar tribunal A tribunal, generally, is any person or institution with authority ...
. These groups were usually based on existing societal structures like villages, towns, parishes, and guilds. Unlike modern courts, the medieval
English court The courts of England and Wales, supported administratively by Her Majesty's Courts and Tribunals Service Her Majesty's Courts and Tribunals Service is an executive agency of the Ministry of Justice (United Kingdom), Ministry of Justice. It w ...
s did not question the right of the actual plaintiffs to sue on behalf of a group or a few representatives to defend an entire group. From 1400 to 1700, group litigation gradually switched from being the norm in England to the exception. The development of the concept of the
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

corporation
led to the wealthy supporters of the corporate form becoming suspicious of all unincorporated legal entities, which in turn led to the modern concept of the
unincorporated Unincorporated may refer to: * Unincorporated area Sign at Heinola, an unincorporated community in Otter Tail County, Minnesota.">Minnesota.html" ;"title="Otter Tail County, Minnesota">Otter Tail County, Minnesota. An unincorporated area is ...
or
voluntary association A voluntary group or union (also sometimes called a voluntary organization, common-interest association, association, or society) is a group of individuals who enter into an agreement, usually as volunteers, to form a body (or organization ...
. The tumultuous history of the
Wars of the Roses The Wars of the Roses were a series of fifteenth-century English civil wars for control of the throne of England, fought between supporters of two rival cadet branches of the royal House of Plantagenet: the House of Lancaster, represented by a ...
and then the
Star Chamber The Star Chamber (Latin Latin (, or , ) is a classical language A classical language is a language A language is a structured system of communication Communication (from Latin ''communicare'', meaning "to share" or "to be in r ...
resulted in periods during which the common law courts were frequently paralyzed, and out of the confusion the
Court of Chancery The Court of Chancery was a court of equity A court of equity, equity court or chancery court is a court A court is any person or institution, often as a government institution, with the authority to Adjudication, adjudicate legal dispu ...

Court of Chancery
emerged with exclusive jurisdiction over group litigation. By 1850, the
Parliament of England The Parliament of England was the legislature A legislature is an assembly Assembly may refer to: Organisations and meetings * Deliberative assembly A deliberative assembly is a gathering of members (of any kind of collective) who u ...
had enacted several statutes on a case-by-case basis to deal with issues regularly faced by certain types of organizations, like joint-stock companies, and with the impetus for most types of group litigation removed, it went into a steep decline in English jurisprudence from which it never recovered. It was further weakened by the fact that
equity Equity may refer to: Finance, accounting and ownership *Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other value to a business ** Home equity, the diffe ...
pleading, in general, was falling into disfavor, which culminated in the
Judicature Acts The Judicature Acts are a series of Acts of Parliament Acts of parliament, sometimes referred to as primary legislation In parliamentary systems and presidential systems of government, primary legislation and secondary legislation, the latte ...
of 1874 and 1875. Group litigation was essentially dead in England after 1850.


United States

Class actions survived in the United States thanks to the influence of Supreme Court Associate Justice
Joseph Story Joseph Story (September 18, 1779 – September 10, 1845) was an associate justice of the Supreme Court of the United States An associate justice of the Supreme Court of the United States is any member of the Supreme Court of the United Stat ...

Joseph Story
, who imported it into
U.S. law The law of the United States comprises many levels of codified and uncodified forms of law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unifie ...
through summary discussions in his two equity treatises as well as his opinion in '' West v. Randall'' (1820). However, Story did not necessarily endorse class actions, because he "could not conceive of a modern function or a coherent theory for representative litigation." The oldest predecessor to the class-action rule in the United States was in the
Federal Equity Rules The Federal Equity Rules were court rules that, until 1938, governed civil procedure Civil procedure is the body of law that sets out the rules and standards that courts follow when adjudicating civil lawsuits (as opposed to procedures in crimin ...
, specifically Equity Rule 48, promulgated in 1842.
Where the parties on either side are very numerous, and cannot, without manifest inconvenience and oppressive delays in the suit, be all brought before it, the court in its discretion may dispense with making all of them parties, and may proceed in the suit, having sufficient parties before it to represent all the adverse interests of the plaintiffs and the defendants in the suit properly before it. But in such cases, the decree shall be without prejudice to the rights and claims of all the absent parties.
This allowed for representative suits in situations where there were too many individual parties (which now forms the first requirement for class-action litigation – numerosity). However, this rule did not allow such suits to bind similarly situated absent parties, which rendered the rule ineffective. Within ten years, the Supreme Court interpreted Rule 48 in such a way so that it could apply to absent parties under certain circumstances, but only by ignoring the plain meaning of the rule. In the rules published in 1912, Equity Rule 48 was replaced with Equity Rule 38 as part of a major restructuring of the Equity Rules, and when federal courts merged their legal and equitable procedural systems in 1938, Equity Rule 38 became Rule 23 of the
Federal Rules of Civil Procedure The Federal Rules of Civil Procedure (officially abbreviated Fed. R. Civ. P.; colloquially FRCP) govern civil procedure Civil procedure is the body of law Law is a system A system is a group of Interaction, interacting or interrela ...
.


Modern developments

A major revision of the FRCP in 1966 radically transformed Rule 23, made the opt-out class action the standard option, and gave birth to the modern class action. Entire treatises have been written since to summarize the huge mass of law that sprang up from the 1966 revision of Rule 23. Just as medieval group litigation bound all members of the group regardless of whether they all actually appeared in court, the modern class action binds ''all'' members of the class, except for those who choose to opt-out (if the rules permit them to do so). The Advisory Committee that drafted the new Rule 23 in the mid-1960s was influenced by two major developments. First was the suggestion of Harry Kalven, Jr. and Maurice Rosenfield in 1941 that class-action litigation by individual shareholders on behalf of all shareholders of a company could effectively supplement direct government regulation of securities markets and other similar markets. The second development was the rise of the
civil rights movement The 1954–1968 civil rights movement in the United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North ...
,
environmentalism Environmentalism or environmental rights is a broad philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about existence Existence is the ability of an entity to interact with physical real ...
and
consumerism Consumerism is a social Social organisms, including humans, live collectively in interacting populations. This interaction is considered social whether they are aware of it or not, and whether the exchange is voluntary/involuntary. Etymology ...
. The groups behind these movements, as well as many others in the 1960s, 1970s and 1980s, all turned to class actions as a means for achieving their goals. For example, a 1978 environmental law treatise reprinted the ''entire'' text of Rule 23 and mentioned "class actions" 14 times in its index. Businesses targeted by class actions for inflicting massive aggregate harm have sought ways to avoid class actions altogether. In the 1990s, the U.S. Supreme Court issued several decisions that strengthened the "federal policy favoring
arbitration Arbitration, a form of alternative dispute resolution Alternative dispute resolution (ADR), or external dispute resolution (EDR), typically denotes a wide range of dispute resolution processes and techniques that act as a means for disag ...
".Giles M. (2005)
Opting Out of Liability
. ''Michigan Law Review''.
In response, lawyers have added provisions to consumer
contracts of adhesion A standard form contract (sometimes referred to as a ''contract of adhesion,'' a ''leonine contract'', a ''take-it-or-leave-it contract'', or a ''boilerplate text, boilerplate contract'') is a contract between two parties, where the terms and con ...
called "collective action waivers", which prohibit those signing the contracts from bringing class-action suits. In 2011, the
U.S. Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States of America The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or Americ ...

U.S. Supreme Court
ruled in a 5–4 decision in '' AT&T Mobility v. Concepcion'' that the Federal Arbitration Act of 1925 preempts state laws that prohibit contracts from disallowing class-action lawsuits, which will make it more difficult for consumers to file class-action lawsuits. The dissent pointed to a saving clause in the federal act which allowed states to determine how a contract or its clauses may be revoked. In two major 21st-century cases, the Supreme Court ruled 5–4 against certification of class actions due to differences in each individual members' circumstances: first in '' Wal-Mart v. Dukes'' (2011) and later in ''
Comcast Corp. v. Behrend ''Comcast Corp. v. Behrend'', 569 U.S. 27 (2013), is a United States Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the Federal judiciary of the United States, federal judiciary of the United States ...
'' (2013). Companies may insert the phrase "may elect to resolve any claim by individual arbitration" into their consumer and employment contracts to use arbitration and prevent class-action lawsuits. Rejecting arguments that they violated employees’ rights to collective bargaining, and that modestly-valued consumer claims would be more efficiently litigated within the parameters of one lawsuit, the U. S. Supreme Court, in '' Epic Systems Corp. v. Lewis'' (2018), sanctioned the use of so-called "class action waivers". Citing its deference to freedom to contract principles, the Epic Systems opinion opened the door dramatically to the use of these waivers as a condition of employment, consumer purchases and the like. Some commentators in opposition to the ruling see it as a "death knell" to many employment and consumer class actions, and have increasingly pushed for legislation to circumvent it in hopes of reviving otherwise-underrepresented parties’ ability to litigate on a group basis. Supporters (mostly pro-business) of the high court's ruling argue its holding is consistent with private contract principles. Many of those supporters had long-since argued that class action procedures were generally inconsistent with due process mandates and unnecessarily promoted litigation of otherwise small claims—thus heralding the ruling's anti-litigation effect. In 2017, the U.S. Supreme Court issued its opinion in Bristol-Meyer Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017), holding that over five hundred plaintiffs from other states cannot bring a consolidated mass action against the pharmaceutical giant in the State of California. This opinion may arguably render nationwide mass action and class action impossible in any single state besides the defendant's home state. In 2020, the 11th Circuit Court of Appeals found incentive awards are impermissible. Incentive awards are a relatively modest payment made to class representatives as part of a class settlement. The ruling was a response to an objector who claimed Rule 23 required that the fee petition be filed ''before'' the time frame for class member objections to be filed; and payments to the class representative violates doctrine from two U.S. Supreme Court cases from the 1800s.


Statistics

As of 2010, there was no publicly maintained list of nonsecurities class-action settlements, although a securities class-action database exists in the Stanford Law School Securities Class Action Clearinghouse and several for-profit companies maintain lists of the securities settlements. One study of federal settlements required the researcher to manually search databases of lawsuits for the relevant records, although state class actions were not included due to the difficulty in gathering the information. Another source of data is U.S. Bureau of Justice Statistics ''Civil Justice Survey of State Courts'', which offers statistics for the year 2005.


Advantages

Proponents of class actions state that they offer a number of advantages because they aggregate many individualized claims into one representational
lawsuit A lawsuit is a proceeding by a party or parties against another in the civil Civil may refer to: *Civic virtue, or civility *Civil action, or lawsuit *Civil affairs *Civil and political rights *Civil disobedience *Civil engineering *Civil ...
. First, aggregation can increase the efficiency of the legal process, and lower the costs of litigation. In cases with common questions of law and fact, aggregation of claims into a class action may avoid the necessity of repeating "days of the same
witnesses In law, a witness is someone who has knowledge about a matter, whether they have sensed it or are testifying on another witnesses' behalf. In law a witness is someone who, either voluntarily or under compulsion, provides testimonial evidence, ei ...
,
exhibits An exhibition, in the most general sense, is an organized presentation and display of a selection of items. In practice, exhibitions usually occur within a cultural or educational setting such as a museum A museum ( ; plural museums or, r ...
and issues from
trial In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by ...
to trial". ''Jenkins v. Raymark Indus. Inc.'', 782 F.2d 468, 473 (5th Cir. 1986) (granting certification of a class action involving
asbestos Asbestos (pronounced: or ) is a naturally occurring fibrous silicate mineral Silicate minerals are rock-forming mineral In geology and mineralogy, a mineral or mineral species is, broadly speaking, a solid chemical compound with a fair ...
). Second, a class action may overcome "the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights". ''Amchem Prods., Inc. v. Windsor'', 521 U.S. 591, 617 (1997) (quoting ''Mace v. Van Ru Credit Corp.'', 109 F.3d 388, 344 (7th Cir. 1997)). "A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone's (usually an attorney's) labor." ''Amchem Prods., Inc.'', 521 U.S. at 617 (quoting ''Mace'', 109 F.3d at 344). In other words, a class action ensures that a
defendant In court proceedings, a defendant is a person A person (plural people or persons) is a being that has certain capacities or attributes such as reason Reason is the capacity of consciously applying logic Logic is an interdisciplinary fi ...
who engages in widespread harmbut does so minimally against each individual
plaintiff A plaintiff ( Π in legal shorthand) is the party who initiates a lawsuit A lawsuit is a proceeding by a party or parties against another in the civil Civil may refer to: *Civic virtue, or civility *Civil action, or lawsuit *Civil aff ...
must compensate those individuals for their injuries. For example, thousands of shareholders of a public company may have losses too small to justify separate lawsuits, but a class action can be brought efficiently on behalf of all shareholders. Perhaps even more important than compensation is that class treatment of claims may be the only way to impose the costs of wrongdoing on the wrongdoer, thus deterring future wrongdoing. Third, class-action cases may be brought to purposely change behavior of a class of which the defendant is a member. '' Landeros v. Flood'' (1976) was a landmark case decided by the
California Supreme Court The Supreme Court of California is the highest and final court of appeals in the courts A court is any person or institution, often as a government A government is the system or group of people governing an organized community, g ...
that aimed at purposefully changing the behavior of doctors, encouraging them to report suspected child abuse. Otherwise, they would face the threat of civil action for damages in
tort A tort, in common law In law, common law (also known as judicial precedent or judge-made law, or ) is the body of law created by judges and similar quasi-judicial by virtue of being stated in written opinions. ' is the most-used legal dict ...

tort
proximately flowing from the failure to report the suspected injuries. Previously, many physicians had remained reluctant to report cases of apparent child abuse, despite existing law that required it. Fourth, in "limited fund" cases, a class action ensures that all
plaintiff A plaintiff ( Π in legal shorthand) is the party who initiates a lawsuit A lawsuit is a proceeding by a party or parties against another in the civil Civil may refer to: *Civic virtue, or civility *Civil action, or lawsuit *Civil aff ...
s receive relief and that early-filing plaintiffs do not raid the fund (i.e., the
defendant In court proceedings, a defendant is a person A person (plural people or persons) is a being that has certain capacities or attributes such as reason Reason is the capacity of consciously applying logic Logic is an interdisciplinary fi ...
) of all its
asset In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such a ...
s before other
plaintiffs A plaintiff ( Π in List of legal abbreviations, legal shorthand) is the party who initiates a lawsuit (also known as an ''action'') before a court. By doing so, the plaintiff seeks a legal remedy. If this search is successful, the court will issu ...
may be compensated. See ''Ortiz v. Fibreboard Corp.'', 527 U.S. 815 (1999). A class action in such a situation centralizes all claims into one
venue Venue is the location at which an event takes place. It may refer to: Locations * Venue (law), the place a case is heard * Financial trading venue, a place or system where financial transactions can occur * Music venue, place used for a concer ...
where a court can equitably divide the assets amongst all the
plaintiffs A plaintiff ( Π in List of legal abbreviations, legal shorthand) is the party who initiates a lawsuit (also known as an ''action'') before a court. By doing so, the plaintiff seeks a legal remedy. If this search is successful, the court will issu ...
if they win the case. Finally, a class action avoids the situation where different court rulings could create "incompatible standards" of conduct for the defendant to follow. See Fed. R. Civ. P. 23(b)(1)(A). For example, a court might certify a case for class treatment where a number of individual bond-holders sue to determine whether they may convert their bonds to
common stock Common stock is a form of corporate equity Equity may refer to: Finance, accounting and ownership *Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other v ...
. Refusing to litigate the case in one
trial In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by ...
could result in different outcomes and inconsistent standards of conduct for the defendant
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

corporation
. Thus, courts will generally allow a class action in such a situation. See, e.g., ''Van Gemert v. Boeing Co.'', 259 F. Supp. 125 (S.D.N.Y. 1966). Whether a class action is superior to individual
litigation A lawsuit is a proceeding by a party or parties against another in the civil Civil may refer to: *Civic virtue, or civility *Civil action, or lawsuit *Civil affairs *Civil and political rights *Civil disobedience *Civil engineering *Civil ...
depends on the case and is determined by the judge's ruling on a motion for class certification. The Advisory Committee Note to Rule 23, for example, states that mass torts are ordinarily "not appropriate" for class treatment. Class treatment may not improve the efficiency of a mass tort because the claims frequently involve individualized issues of law and fact that will have to be re-tried on an individual basis. See ''Castano v. Am. Tobacco Co.'', 84 F.3d 734 (5th Cir. 1996) (rejecting nationwide class action against tobacco companies). Mass torts also involve high individual damage awards; thus, the absence of class treatment will not impede the ability of individual claimants to seek justice. Other cases, however, may be more conducive to class treatment. The preamble to the
Class Action Fairness Act of 2005 The U.S. Class Action Fairness Act of 2005, 28 U.S.C. Sections 1332(d), 1453, and 1711–1715, expanded federal subject-matter jurisdiction over many large class-action lawsuits and mass actions taken in the United States. The bill was the fir ...
, passed by the United States Congress, found:
Class-action lawsuits are an important and valuable part of the legal system when they permit the fair and efficient resolution of legitimate claims of numerous parties by allowing the claims to be aggregated into a single action against a defendant that has allegedly caused harm.


Criticisms

There are several criticisms of class actions. The preamble to the Class Action Fairness Act stated that some abusive class actions harmed class members with legitimate claims and defendants that have acted responsibly, adversely affected interstate commerce, and undermined public respect for the country's judicial system. Class members often receive little or no benefit from class actions. Examples cited for this include large fees for the attorneys, while leaving class members with coupons or other awards of little or no value; unjustified awards are made to certain plaintiffs at the expense of other class members; and confusing notices are published that prevent class members from being able to fully understand and effectively exercise their rights. For example, in the United States, class lawsuits sometimes bind all class members with a low settlement. These "
coupon settlement In law, a coupon settlement is a resolution between disputing parties in a class action lawsuit, reached either before or after court action begins. In a coupon settlement, class members receive coupons or other promises for products or services i ...
s" (which usually allow the plaintiffs to receive a small benefit such as a small check or a coupon for future services or products with the defendant company) are a way for a defendant to forestall major liability by precluding many people from litigating their claims separately, to recover reasonable compensation for the damages. However, existing law requires judicial approval of all class-action settlements, and in most cases, class members are given a chance to opt out of class settlement, though class members, despite opt-out notices, may be unaware of their right to opt-out because they did not receive the notice, did not read it or did not understand it. The Class Action Fairness Act of 2005 addresses these concerns. An independent expert may scrutinize coupon settlements before judicial approval in order to ensure that the settlement will be of value to the class members (28 U.S.C.A. 1712(d)). Further, if the action provides for settlement in coupons, "the portion of any attorney’s fee award to class counsel that is attributable to the award of the coupons shall be based on the value to class members of the coupons that are redeemed". 28 U.S.C.A. 1712(a).


Ethics

Class action cases present significant ethical challenges. Defendants can hold reverse auctions and any of several parties can engage in collusive settlement discussions. Subclasses may have interests that diverge greatly from the class but may be treated the same. Proposed settlements could offer some groups (such as former customers) much greater benefits than others. In one paper presented at an ABA conference on class actions in 2007, authors commented that "competing cases can also provide opportunities for collusive settlement discussions and reverse auctions by defendants anxious to resolve their new exposure at the most economic cost".


Defendant class action

Although normally plaintiffs are the class, defendant class actions are also possible. For example, in 2005, the
Roman Catholic Archdiocese of Portland in Oregon The Archdiocese of Portland in Oregon (''Archidioecesis Portlandensis in Oregonia'') is an archdiocese of the Catholic Church in the Pacific Northwest region of the United States. It encompasses the western part of the state of Oregon, from the su ...

Roman Catholic Archdiocese of Portland in Oregon
was sued as part of the Catholic priest sex-abuse scandal. All parishioners of the Archdiocese's churches were cited as a defendant class. This was done to include their assets (local churches) in any settlement. Where both the plaintiffs and the defendants have been organized into court-approved classes, the action is called a bilateral class action.


Mass actions

In a class action, the plaintiff seeks court approval to litigate on behalf of a group of similarly situated persons. Not every plaintiff looks for or could obtain such approval. As a procedural alternative, plaintiff's counsel may attempt to sign up every similarly situated person that counsel can find as a client. Plaintiff's counsel can then join the claims of all of these persons in one complaint, a so-called "mass action", hoping to have the same efficiencies and economic leverage as if a class had been certified. Because mass actions operate outside the detailed procedures laid out for class actions, they can pose special difficulties for both plaintiffs, defendants, and the court. For example, settlement of class actions follows a predictable path of negotiation with class counsel and representatives, court scrutiny, and notice. There may not be a way to uniformly settle all of the many claims brought via a mass action. Some states permit plaintiff's counsel to settle for all the mass action plaintiffs according to a majority vote, for example. Other states, such as New Jersey, require each plaintiff to approve the settlement of that plaintiff's own individual claims.


Class action legislation


Argentina

Class actions were recognized in "Halabi" leading case (
Supreme Court A supreme court is the highest court A court is any person or institution, often as a government institution, with the authority to Adjudication, adjudicate legal disputes between Party (law), parties and carry out the administration of just ...
, 2009).


Australia and New Zealand

Class actions became part of the Australian legal landscape only when the
Federal Parliament The Parliament of Australia (officially the Federal Parliament, also called the Commonwealth Parliament) is the legislative branch A legislature is a deliberative assembly A deliberative assembly is a gathering of members (of any kind o ...
amended the Federal Court of Australia Act ("the FCAA") in 1992 to introduce the "representative proceedings", the equivalent of the American "class actions". Likewise, class actions appeared slowly in the New Zealand legal system. However, a group can bring litigation through the action of a representative under the High Court Rules which provide that one or a multitude of persons may sue on behalf of, or for the benefit of, all persons "with the same interest in the subject matter of a proceeding". The presence and expansion of litigation funders have been playing a significant role in the emergence of class actions in New Zealand. For example, the "Fair Play on Fees" proceedings in relation to penalty fees charged by banks were funded by Litigation Lending Services (LLS), a company specializing in the funding and management of litigation in Australia and New Zealand. It was the biggest class-action suit in New Zealand history.


Austria

The Austrian Code of Civil Procedure (''Zivilprozessordnung'' – ZPO) does not provide for a special proceeding for complex class-action litigation. However, Austrian consumer organizations (''Verein für Konsumenteninformation'' (VKI) and the Federal Chamber of Labour / ''Bundesarbeitskammer'') have brought claims on behalf of hundreds or even thousands of consumers. In these cases, the individual consumers assigned their claims to one entity, who has then brought an ordinary (two-party) lawsuit over the assigned claims. The monetary benefits were redistributed among the class. This technique, labeled as "class action Austrian style," allows for a significant reduction of overall costs. The Austrian Supreme Court, in a judgment, confirmed the legal admissibility of these lawsuits under the condition that all claims are essentially based on the same grounds. The
Austrian Parliament The Austrian Parliament (german: Österreichisches Parlament) is the bicameral Bicameralism is the practice of having a legislature A legislature is an assembly Assembly may refer to: Organisations and meetings * Deliberative assemb ...
unanimously requested the Austrian Federal Minister for Justice to examine the possibility of new legislation providing for a cost-effective and appropriate way to deal with mass claims. Together with the Austrian Ministry for Social Security, Generations and Consumer Protection, the Justice Ministry opened the discussion with a conference held in Vienna in June 2005. With the aid of a group of experts from many fields, the Justice Ministry began drafting the new law in September 2005. With the individual positions varying greatly, a political consensus could not be reached.


Canada

Provincial laws in Canada allow class actions. All provinces permit plaintiff classes and some permit defendant classes.
Quebec ) , image_shield=Armoiries du Québec.svg , image_flag=Flag of Quebec.svg , coordinates= , AdmittanceDate=July 1, 1867 , AdmittanceOrder=1st, with New Brunswick ("Hope restored") , image_map = New Brunswick in Canada 2.svg , ...

Quebec
was the first province to enact class proceedings legislation, in 1978.
Ontario ("Loyal she began, loyal she remains") , Label_map = yes , image_map = Ontario in Canada 2.svg , map_alt = Map showing Ontario's location east/central of Canada. , coordinates = , cap ...

Ontario
was next, with the Class Proceedings Act, 1992. As of 2008, 9 of 10 provinces had enacted comprehensive class actions legislation. In
Prince Edward Island (''The small protected by the great'') , image_map = Prince Edward Island in Canada (special marker) 2.svg , Label_map = yes , coordinates = , official_lang = English English usually ref ...

Prince Edward Island
, where no comprehensive legislation exists, following the decision of the
Supreme Court of Canada Supreme may refer to: * Supreme (brand), a clothing brand based in New York * Supreme (comics), a comic book superhero * Supreme (cookery), a term used in cookery * Supreme (film), ''Supreme'' (film), a 2016 Telugu film * Supreme (producer), hip-h ...

Supreme Court of Canada
in ''Western Canadian Shopping Centres Inc. v. Dutton'', 0012 S.C.R. 534, class actions may be advanced under a local rule of court. The
Federal Court of Canada The Federal Court of Canada, which succeeded the Exchequer Court of Canada in 1971, was a national court of Canada that had limited jurisdiction to hear certain types of disputes arising under the Parliament of Canada, federal government's Canadia ...
permits class actions under Part V.1 of the Federal Courts Rules. Legislation in
Saskatchewan ("From Many Peoples Strength") , image_map = Saskatchewan in Canada 2.svg , Label_map = yes , coordinates = , official_lang = English language, English , capital = Regina, S ...
,
Manitoba Manitoba ( ) is a Provinces and territories of Canada, province of Canada at the Centre of Canada, longitudinal centre of the country. It is Canada's Population of Canada by province and territory, fifth-most populous province, with a population o ...

Manitoba
,
Ontario ("Loyal she began, loyal she remains") , Label_map = yes , image_map = Ontario in Canada 2.svg , map_alt = Map showing Ontario's location east/central of Canada. , coordinates = , cap ...

Ontario
, and
Nova Scotia ) , image_map = Nova Scotia in Canada 2.svg , Label_map = yes , coordinates = , official_lang = English (''de facto'') , RegionalLang = French, Scots Gaelic , capital ...

Nova Scotia
expressly or by judicial opinion has been read to allow for what are informally known as national "opt-out" class actions, whereby residents of other provinces may be included in the class definition and potentially be bound by the court's judgment on common issues unless they opt-out in a prescribed manner and time. Court rulings have determined that this permits a court in one province to include residents of other provinces in the class action on an "opt-out" basis. Judicial opinions have indicated that provincial legislative national opt-out powers should not be exercised to interfere with the ability of another province to certify a parallel class action for residents of other provinces. The first court to certify will generally exclude residents of provinces whose courts have certified a parallel class action. However, in the
Vioxx Rofecoxib was a COX-2 selective nonsteroidal anti-inflammatory drug (NSAID Nonsteroidal anti-inflammatory drugs (NSAIDs) are members of a drug class A drug is any chemical substance A chemical substance is a form of matter In cl ...
litigation, two provincial courts certified overlapping class actions whereby Canadian residents were class members in two class actions in two provinces. Both decisions are under appeal. The largest class action suit in Canada was settled in 2005 after Nora Bernard initiated efforts that led to an estimated 79,000 survivors of Canada's
residential school system In Canada, the Indian residential school system was a network of boarding schools for Indigenous peoples in Canada, Indigenous peoples. The network was funded by the Government of Canada, Canadian government's Aboriginal Affairs and Northern ...
suing the
Canadian government The government of Canada (french: Gouvernement du Canada) is the body responsible for the federation, federal administration of Canada. A constitutional monarchy, the Crown is the Corporation sole#The Crown, corporation sole, assuming distinct r ...
. The settlement amounted to upwards of $5 billion.


Chile

Chile approved class actions in 2004. The Chilean model is technically an opt-out issue class action, followed by a compensatory stage which can be collective or individual. This means that the class action is designed to declare the defendant generally liable with ''
erga omnes ''Erga omnes'' is a Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the ...
'' effects if and only if the defendant is found liable, and the
declaratory judgment A declaratory judgment, also called a declaration, is the legal determination of a court A court is any person or institution, often as a government A government is the system or group of people governing an organized commun ...
can be used then to pursue damages in the same procedure or in individual ones in different jurisdictions. If the latter is the case, the liability cannot be discussed, but only the damages. There under the Chilean procedural rules, one particular case works as an opt-out class action for damages. This is the case when defendants can identify and compensate consumers directly, i.e. because it is their banking institution. In such cases, the judge can skip the compensatory stage and order redress directly. Since 2005 more than 100 cases have been filed, mostly by ''Servicio Nacional del Consumidor'' ERNAC the Chilean consumer protection agency. Salient cases have been ''Condecus v. BancoEstado'' and ''SERNAC v. La Polar''.


France

Under French law, an association can represent the collective interests of consumers; however, each claimant must be individually named in the lawsuit. On January 4, 2005, urged changes that would provide greater consumer protection. A draft bill was proposed in April 2006 but did not pass. Following the change of majority in France in 2012, the new government proposed introducing class actions into French law. The project of "loi Hamon" of May 2013 aimed to limit the class action to consumer and competition disputes. The law was passed on March 1, 2014.


Germany

Class actions are generally not permitted in Germany, as German law does not recognize the concept of a targeted class being affected by certain actions. This requires each plaintiff to individually prove that they were affected by an action, and present their individual damages, and prove the causality between both parties. Joint litigation ( Streitgenossenschaft) is a legal act that may permit plaintiffs that are in the same legal community with respect to the dispute, or are entitled by the same factual or legal reason. These are not typically regarded as class action suits, as each individual plaintiff is entitled to compensation for their individual, incurred damages and not as a result of being a member of a class. The combination of court cases ( Prozessverbindung) is another method that permits a judge to combine multiple separate court cases into a single trial with a single verdict. According t
§ 147 ZPO
this is only permissible if all cases are regarding the same factual and legal event and basis.


Mediation Procedure

A genuine extension of the legal effect of a court decision beyond the parties involved in the proceedings is offered under corporate law. This procedure applies to the review of stock payoffs under ''Stock Corporation Act'' (''Aktiengesetz''. Pursuant to Sec. 13 Sentence 2 ''Mediation Procedure Act'' (''Spruchverfahrensgesetz'' ), the court decision concerning the dismissal or direction of a binding arrangement of an adequate compensation is effective for and against all shareholders, including those who have already agreed to a previous settlement in this matter.


Investor Model Case Proceedings

The ''Capital Investor Model Case Act'' (''Kapitalanleger-Musterverfahrensgesetz'') is an attempt to enable model cases to be brought by a large number of potentially affected parties in the event of disputes, limited to the investment market. In contrast to the U.S. class actions, each affected party must file a lawsuit in its own name in order to participate in the model proceedings.


Model Declaratory Action

Effective on November 1, 2018, the Civil Code (
Bürgerliches Gesetzbuch The ''Bürgerliches Gesetzbuch'' (, lit.: 'Civil Law Book'), abbreviated BGB, is the civil code A civil code is a codification of private law Private law is that part of a civil law Civil law may refer to: * Civil law (common law) Civil la ...
) introduced the Model Declaratory Action (§ 606) that created the ability to bundle similar claims by many affected parties efficiently into one proceeding. Registered Consumer Protection Associations can file – if they represent at least 10 individuals – for a (general) judicial finding whether the factual and legal requirements for of claims or legal relationships are met or not. These individuals have to register in order to
inhibit Inhibitor or inhibition may refer to: In biology * Enzyme inhibitor 400px, An enzyme binding site that would normally bind substrate can alternatively bind a competitive inhibitor, preventing substrate access. Dihydrofolate reductase is inhi ...
their claims. Since these Adjudications are more of a general nature, each individual must assert their claims in their own court proceedings. The competent court is bound by the Model Declaratory Action decision.


Associate Action

German law also recognizes the ''Associative Action'' (''Verbandklage''), which is comparable to the class action and is predominantly used in environmental law. In civil law, the ''Associative Action'' is represented by a foreign body in the matter of asserting and enforcing individual claims and the claimant can no longer control the proceedings.


Class Action With Relation to the United States

Class actions can be brought by Germans in the U.S. for events in Germany if the facts of the case relate to the U.S. For example, in the case of the
Eschede derailment The Eschede derailment occurred on 3 June 1998, near the village of Eschede in the Celle (district), Celle district of Lower Saxony, Germany, when a high-speed rail, high-speed train derailed and crashed into a road bridge. 101 people were killed ...
, the lawsuit was allowed because several aggrieved parties came from the US and had purchased rail tickets there.


India

Decisions of the
Indian Supreme Court The Supreme Court of India (IAST The International Alphabet of Sanskrit Transliteration (IAST) is a transliteration scheme that allows the lossless romanisation of Brahmic family, Indic scripts as employed by Sanskrit and related Indic lang ...
in the 1980s loosened strict ''
locus standi Locus (plural loci) is Latin for "place". It may refer to: Entertainment * Locus (comics) Locus is the name of two fictional characters appearing in American comic books published by Marvel Comics. The first one, whose real name is Aaron Vern ...
'' requirements to permit the filing of suits on behalf of rights of deprived sections of society by public-minded individuals or bodies. Although not strictly "class action litigation" as it is understood in American law,
Public Interest LitigationPublic interest litigation (PIL) refers to litigation undertaken to secure public interest and demonstrates the availability of justice to socially-disadvantaged parties and was introduced by Justice P. N. Bhagwati. It is a relaxation on the traditi ...
arose out of the wide powers of judicial review granted to the Supreme Court of India and the various High Courts under Article 32 and Article 226 of the
Constitution of India The Constitution of India (IAST The International Alphabet of Sanskrit Transliteration (IAST) is a transliteration scheme that allows the lossless romanisation Romanization or romanisation, in linguistics Linguistics is the sci ...

Constitution of India
. The sort of remedies sought from courts in Public Interest Litigation go beyond mere award of damages to all affected groups, and have sometimes (controversially) gone on to include Court monitoring of the implementation of legislation and even the framing of guidelines in the absence of Parliamentary legislation. However, this innovative jurisprudence did not help the victims of the
Bhopal gas tragedy The Bhopal disaster, also referred to as the Bhopal gas tragedy, was a gas leak incident on the night of 2–3 December 1984 at the Union Carbide India Limited (UCIL) pesticide plant in Bhopal, Madhya Pradesh, India. It is considered among List ...
, who were unable to fully prosecute a class-action litigation (as understood in the American sense) against
Union Carbide Union Carbide Corporation is an American chemical corporation wholly owned (since February 6, 2001) by Dow Chemical Company The Dow Chemical Company (TDCC) is an American multinational chemical corporation headquartered in Midland, Michigan, ...

Union Carbide
due to procedural rules that would make such litigation impossible to conclude and unwieldy to carry out. Instead, the
Government of India The Government of India (ISO The International Organization for Standardization (ISO ) is an international standard An international standard is a technical standard A technical standard is an established norm (social), norm or requiremen ...
exercised its right of ''
parens patriae ''Parens patriae'' is Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the R ...
'' to appropriate all the claims of the victims and proceeded to litigate on their behalf, first in the New York courts and later, in the Indian courts. Ultimately, the matter was settled between the Union of India and Union Carbide (in a settlement overseen by the Supreme Court of India) for a sum of as a complete settlement of all claims of all victims for all time to come. Public interest litigation has now broadened in scope to cover larger and larger groups of citizens who may be affected by government inaction. Examples of this trend include the conversion of all public transport in the city of
Delhi Delhi (; ''Dillī''; ''Dillī''; ''Dêhlī''), officially the National Capital Territory (NCT) of Delhi, is a city and a of containing , the capital of India. * * * Straddling the river, but primarily its western or right bank, Delhi ...

Delhi
from diesel engines to
CNG Compressed natural gas is a fuel gas Fuel gas is any one of a number of fuel A fuel is any material that can be made to react with other substances so that it releases energy as thermal energy Thermal radiation in visible light can be se ...

CNG
engines on the basis of the orders of the
Delhi High Court The High Court of Delhi (IAST The International Alphabet of Sanskrit Transliteration (IAST) is a transliteration scheme that allows the lossless romanisation Romanization or romanisation, in linguistics Linguistics is the scien ...
; the monitoring of forest use by the High Courts and the Supreme Court to ensure that there is no unjustified loss of forest cover; and the directions mandating the disclosure of assets of electoral candidates for the Houses of Parliament and State Assembly. The Supreme Court has observed that the PIL has tended to become a means to gain publicity or obtain relief contrary to constitutionally valid legislation and policy. Observers point out that many High Courts and certain Supreme Court judges are reluctant to entertain PILs filed by
non-governmental organization A non-governmental organization, or simply an NGO, is an organization An organization, or organisation (Commonwealth English The use of the English language English is a of the , originally spoken by the inhabitants of ...
s and activists, citing concerns of
separation of powers Separation of powers refers to the division of a state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * The State (newspaper), ''The State'' ...
and
parliamentary sovereignty Parliamentary sovereignty (also called parliamentary supremacy or legislative supremacy) is a concept in the constitutional law Constitutional law is a body of law which defines the role, powers, and structure of different entities within a , n ...
.


Ireland

In
Irish lawLaw of Ireland or Irish law may refer to: * Early Irish law (Brehon law) of Medieval Ireland * Alternative law in Ireland prior to 1921 * Law of the Republic of Ireland * Law of Northern Ireland {{disambig *Arbitration clause, a contract clause that attempts to prevent lawsuits by requiring arbitration in a private forum *Bill of Peace, an English predecessor to class actions *''Class Action (film), Class Action'', 1991 American legal drama film *Collective redress, a similar legal framework under development in the European Union *''Dukes v. Wal-Mart'' (2011), the largest civil rights class-action lawsuit to date *List of class action lawsuits *
Public Interest LitigationPublic interest litigation (PIL) refers to litigation undertaken to secure public interest and demonstrates the availability of justice to socially-disadvantaged parties and was introduced by Justice P. N. Bhagwati. It is a relaxation on the traditi ...
, a similar system adopted in India *Securities Class Action


References


External links


United States


''Manual for Complex Litigation, Fourth''''Stanford Securities Class Action Clearinghouse''Class Action Lawsuits: A Legal Overview for the 115th Congress
Congressional Research Service
Class Actions Seven Years After the Class Action Fairness Act: Hearing before the Subcommittee on the Constitution of the Committee on the Judiciary, House of Representatives, One Hundred Twelfth Congress, Second Session, June 1, 2012


Europe



{{DEFAULTSORT:Class Action Class action lawsuits, * Civil law (common law) pt:Ação coletiva