Effectiveness of a class action

In the countries of the continental legal system, the protection of public interests is entrusted to the state, for which its bodies are endowed with appropriate powers.

At the same time, state bodies, due to various reasons and circumstances, do not always and insufficiently quickly respond to violations of public interests. In such a situation, individuals whose rights and interests are violated, as a rule, cannot independently initiate a lawsuit in order to stop the violations taking place.

Almost the only remedy available to them is to apply to the court with a claim for the inaction of the relevant state authorities. However, even such a successful appeal is not always a sufficient guarantee of rectification of the situation and elimination of violations of the public interest.

On the other hand, there may be cases when certain violations, without reaching the level of violation of public interests, nevertheless affect the rights and interests of a large number of citizens (for example, consumers of the same product or service).

The latter, despite the identity of the violation committed and the commonality of their interests, can ensure the protection of their rights only by individual appeal to the court. At the same time, persons who did not apply to the court – out of ignorance, due to unwillingness or lack of time and opportunity – do not receive the right to compensation for the harm caused to them.

To solve both of the above problems in US law, one of the most famous procedural institutions, the class action, was developed.

A class action is a kind of private law alternative to the activities of state bodies to protect public interests. A significant proportion of class action lawsuits in the United States are based on violations of antitrust or shareholder rights laws.

Claimants in this case can be, for example, all those who bought a certain product for a certain time at monopoly high prices or shareholders of the offending company. At the same time, in Europe, the control of the monopolization process is entrusted to special bodies.

The experience of the United States of America

Under US federal law, a class action is any civil action brought in a United States court under rule 23 of the Federal Rules of Civil Procedure (FRPC). In turn, Rule 23 of the FPCP specifies that one or more members of a group may bring and be held liable as a party on representation on behalf of the entire group under the following conditions:

  • the group is so numerous that it is not practically possible to unite all members in the case;
  • there are questions of law or facts common to the whole group;
  • the claims or objections to them of the parties on representation are typical for this group;
  • the parties on representation will protect the interests of the group in a fair and proper manner.

Thus, a class action is a claim by which the interests of society or the rights and interests of a large group of persons with the same requirements are protected, filed by one or more subjects (representatives of the group) acting independently in a lawsuit for the entire group and on its behalf. In other words, a class action is a lawsuit in defense of the interests of an indefinite circle of persons.

The scientific doctrine notes that a class action is a synthesis of two procedural institutions – complicity (without involving all accomplices) and representation (in the absence of formal powers).

A distinctive feature of a class action is that the court decision issued as a result of its consideration is binding not only for the participants in the process, but also applies to those entities (falling under the definition of the relevant group) who did not take part in its proceedings or did not even know about it. existence.

It should also be noted that US courts have fairly wide discretionary powers in relation to class actions. In particular, a claim does not qualify as a class action until an appropriate court order is issued to do so, based on the criteria listed above in Rule 23 of the FPCP.

One of the first and most important stages in the consideration of a class action is the establishment (identification) by the court of a group, that is, a circle of subjects, to protect the rights and interests of which the class action is directed.

For this purpose, the court uses various sources (documentary records, testimonies). The court may register the group, refuse to register it (in which case the class action proceedings are terminated), or conditionally register the group (reserving the right to change the composition of the group in the future).

As an example of the establishment of a group, the court decision in a class action against tobacco companies (Castano v. American Tobacco Co.), where the group was defined as “all persons in the United States who bought and smoked cigarettes manufactured by the defendant … as well as spouses, children , relatives of smokers.

Notifying all possible members of the registered group is also important. As a rule, this is done by mail. For Americans, mailbox messages about class action cases are as familiar as commercial and political advertisements. The legislation establishes clear requirements for the content of such notices: they should indicate the nature of the claim, the definition of the group, claims, disputed issues, the possibility of exclusion of an individual member from the group at his request, etc.

The result of a class action is, depending on the circumstances of the case, either forcing the defendant to perform certain actions (providing benefits, setting discounts on certain goods or services for members of the group), or the creation by the defendant of a compensation fund to compensate for the losses of all members of the group. Information about the creation of the fund and its functioning is published in the press, and a person who meets the criteria of the group established by the court (even if he was not known at the time of the court decision) can apply to the administration of the fund to resolve the issue of receiving compensation.

A similar mechanism is also used when concluding settlement agreements between plaintiffs and defendants in class actions, to which, in practice, the consideration of class actions most often leads.