A class action lawsuit is qualified if it is brought collectively by a large number of people who harbor the same legal complaint against the same defendant. Products liability is a common area in which class action lawsuits are commenced.

Although each case is different, a typical class action will take at least 2-3 years. But assuming there are no further appeals, class members generally receive payment about 6 to 9 months after a settlement agreement is submitted to the court for preliminary approval.

Class action settlement proceeds are treated like proceeds from any other lawsuit. The IRS treats settlements for physical injury or sickness as non-taxable as long as the claimant did not receive a tax benefit by deducting the related medical expenses on previous years’ tax returns. But claims asserted by a small business in a class action will generally be economic in nature, and may be taxable.

A representative plaintiff is the person who addresses the Court in the name of the other members they wish to represent. If the Court certifies the class action, this person becomes the group representative.

When a class action lawsuit is certified, the judge will provide a Class Definition. The Class Definition will explain who may qualify to benefit from the class action lawsuit. In most class action lawsuits, it is easy to figure out who belongs in the class.

To become a member in a class action lawsuit, you must be identified as someone who has suffered similar damage. Sometimes, the damage is limited to a small amount of financial impact, which the potential Class Member might not even realize has occurred.