A class action lawsuit is filed on behalf of a group of people who have been in some way injured by the actions of a company. It is common to see class action lawsuits filed by members of the company if hiring or salary practices have been illegal. Another type is the class action lawsuit filed against a drug company for making illegal claims about their product, or for causing deaths or physical damage to those taking the drug.

When one joins a class action lawsuit, one usually has to sign papers declaring that he or she then forfeits the right to sue the company as an individual. A successful class action lawsuit awards damages to the plaintiffs, who are those suing the company, according to greatest damage. In most cases not all members of the suit are entitled to equal compensation. Usually the attorneys work on a contingency basis, which means that they will receive a portion of the award but charge their clients no fees if the suit is not successful. That portion can be high, ranging from 30 to 50 percent of the total award.

Awards from a class action lawsuit are split into two portions: punitive and compensatory damages. Compensatory damages are meant to address the defendants (those being sued), and direct damage. These funds will be used to address actual damages caused by the defendants, such as illness, loss of life, and/or pain and suffering. Punitive damages from a class action lawsuit are a form of punishment for the company committing illegal acts, or causing harm. Punitive damages in large class action lawsuits can be particularly high, when it is demonstrated the company has shown great disregard for the health, safety or emotional well being of the plaintiffs.

Class action lawsuits may become jury trials, or may be settled prior to a trial. A suit may be tried in directed mediation. Settlements and mediation mean that damages are agreed to by the defendant/s. Jury trial class action lawsuits can create problems because a company leveled with heavy punitive and compensatory damages can appeal the decision. The appeal process may last for years, so plaintiffs may have to wait a very long time before seeing any money. Companies can also declare bankruptcy, which means the plaintiffs may never be awarded any money.

One of the most well-known class action lawsuit is explored in the film Erin Brockovich. The film is a biopic detailing the class action suit on behalf of the residents of Hinkley, California. They sued Pacific Gas and Electric (PG&E) for lying about using the chemical hexavalent chromium, which then seeped into the ground water and contaminated the water supply. Many residents of Hinkley then became ill with cancer, or had fertility problems. As well, animals living in the small town died quickly.

The suit’s lawyer Ed Masry was able to establish that PG&E knew about the situation and deliberately risked the lives of those living near the power plants by failing to warn the residents. Erin Brockovich, played by Julia Roberts in the film, extensively researched and documented the damages caused to Hinkley residents. Her dedication helped secure the successful verdict against PG&E. Ed Masry chose directed mediation for the class action lawsuit, meaning those severely affected by exposure to chromium were given immediate monetary relief.