Class Action Lawsuit Facts

Class action lawsuits can be complicated procedures. We encourage you to seek the guidance of qualified legal experts. If your attorney advises filing suit and you need access to funds before settlement, contact Lawsuit Hotline to discuss pre-settlement financing.

When a lawsuit is filed on behalf of one or more named plaintiffs, but the case itself applies to a larger group of consumers with a common injury or injuries, a “class” may be proposed to define potential plaintiffs. This is called a class action. Class actions may initially be filed in state courts, but eventually many end up in federal court.

The court will examine the proposed class to determine if the named plaintiffs sufficiently represent the issues of the larger group, and if additional information is needed to move the case forward as a class action. This is referred to as “certifying the class.” During this process, the defendant(s) may file objections to the handling of the case as a class action. Due process also requires that members of the class be notified of the action, the details of any proposed settlement, and the process by which a class member may opt-out of the process, thus protecting his/her right to bring an individual lawsuit.

Class action lawsuits often result from a product liability situation, where the design, production, or sale of a product is potentially harmful to consumers.

There are advantages and disadvantages to treating a claim as a class action. The advantages include:

  • increased efficacy of the legal system;
  • increased incentive to move a larger claim forward rather than a not-worth-the-bother stance;
  • elimination of bigger payouts for early filers in limited-fund situations; and
  • elimination of incompatible or conflicting decisions between multiple courts.

Disadvantages of class actions include the increased potential for abuse of the legal system, and the propensity for attorneys to benefit much more than the class members as a lawsuit is resolved. In some recent cases, class members received coupons as the only compensation in successful litigations.


While watching TV one summer evening in 2009, Jessica heard Hydroxycut, a highly touted weight-loss supplement, mentioned in an advertisement for legal services. Realizing that she hadn’t seen the product advertised in recent weeks, she searched the internet for more information.

The FDA removed the product from the market in May 2009 after at least 23 reports of illness linked to the product, including the death of a 19-year-old due to liver failure.


Lawsuit Hotline specializes in the funding of settled and pre-settled class action lawsuits. During the funding process, Lawsuit Hotline requests some of the case documentation, underwriting evaluates the lawsuit to determine whether funding can be extended, and if approved, a contract is issued for the injured party and his/her attorney to sign. The injured party’s attorney then repays the lien when the case is resolved. All funding is non recourse, which means that if for any reason, there is no recovery on the case, then no money is owed back.