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What Is a Class Action Lawsuit?

A class action lawsuit is a type of lawsuit wherein charges are filed in behalf of a group of people who, in one way or another, have been detrimentally affected by the actions of a company. For example, a class action lawsuit is often filed by the employees of a company if certain practices of policies of the company is seen by the group as illegal or unfair.

When a person becomes a part of a class action lawsuit he usually has to sign a few documents that effectively prevent him from filing a lawsuit against the company as an individual. A class action lawsuit that is successful will mean that the company who was found guilty will be required to pay damages to the plaintiffs (the people who filed the charges). There are cases when the damages awarded to the plaintiffs will not be equal across the board. Some will be compensated more, while others will have a lower amount of compensation. Lawyers who help in the class action lawsuit usually charge their clients on a contingency basis. What this means is that the lawyer will be paid a percentage of the damages awarded to the plaintiffs if the class action lawsuit is successful. A failed lawsuit will mean the lawyer will not be getting any salary or money from the plaintiffs. The reason for this tactic is that lawyers can also earn a lot of money if the lawsuit is successful. Lawyers usually charge between 30 to 50 percent of the total awarded damages.

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