Eli5: What is a “class-action” lawsuit?
In: 7
Imagine I hit you with my car, and your car is damaged. You can sue me for the value of the car, because it was my fault your car was damaged.
Now imagine that you just had your car serviced at my auto shop, and I took your money and pretended to fix your brakes, but actually replaced them with a pair of slinkies. Then your car crashes, not because I actively hit you, but because you didn’t have any brakes. You can still sue me because it’s my fault your car was damaged.
But what happens if I did this with every single person in town? Sure, all of them could sue me, but some people wouldn’t know yet that they have no brakes (they haven’t been in a situation where it would be apparent), and some people couldn’t afford to hire a lawyer to sue me, and some people might sue me after everyone else has sued and so get nothing because I’m out of money.
Also, because of something called collateral estoppel, if one fact is legally found true or untrue, then cases after it can’t challenge it. If you can prove that me installing the slinkies caused the accident, then everyone after can just take that as a given; conversely, if I prove my slinkies were completely irrelevant to your crash, no one else can sue me on that basis.
So instead, a group of people who are all victims of my slinky scheme filed a class-action lawsuit. This accomplishes a couple of things:
* Anyone who either doesn’t know about the suit or can’t afford to sue can still get some restitution that they otherwise wouldn’t have.
* Everyone gets an equal cut of one pot of money if they win, rather than having Person A go first and get $1 million, then Person B sues next and is only able to get half a million, etc., but Person Z gets nothing because I’ve already lost everything to Persons A-Y.
* If one side wins, the case is decided for *everyone*, win or lose.
Incidentally, this last bit is why often class-actions are settled without admitting wrongdoing: it’s a way for the sued person to get the case to go away WITHOUT invoking collateral estoppel.
Latest Answers