May 28, 2015

Types of Class Actions

Consumer Product Class Action

Of the various forms of class actions, consumer product class actions are by far the most prominent. This form of class action encompasses a number of different industries, products and issues. For example, a consumer product class action could involve an automobile just the same as it could include prescribed medication.

Within this category, there are other subcategories. For example:

  • Defective Products: Often a class action lawsuit will involve a product that was improperly manufactured or designed. As a result the product did not perform as promised, or it led to injuries.
  • Harmful Drugs: Drug manufacturers have not always been up front about the side effects of their medications. In cases where these manufacturers have failed to disclose such side effects, leading to injuries and death, class action lawsuits have resulted.
  • Materials: Similar to defective products, in some instances class action lawsuits have been brought against those who provide building materials. In these cases the members of the class allege that the manufacturer demonstrated negligence in providing a substandard product.

These are the major categories encompassed by consumer product class actions, but there are others.

Insurance Class Action

img7Aside from being attached to physical products, class action lawsuits can also pertain to services provided by a number of different businesses. Most notably, insurance companies and their services have been the subject of a number of different class action lawsuits. These lawsuits can pertain to many different issues.

  • Health Insurance: In some instances, health insurance providers may systematically attempt to deny coverage for certain medical procedures or medications.
  • Title Insurance: A proper title search is important when purchasing a home or other property. This insurance is designed to protect the insured in the event that a search does not reveal issues with the title. In some cases, insurers have attempted to avoid paying out claims.
  • Homeowners Insurance: In the event that an accident befalls a homeowner’s property, his or her homeowner’s insurance plan is there to cover repairs and temporary housing. In some cases, insurers have failed to provide the coverage promised to the insured.

The above are the major insurance issues that have been the subject of insurance class action lawsuits. However, any form of insurance can become subject to such a suit, depending upon the circumstances and the number of insured individuals who are affected.

Securities Class Action

There are a number of laws in place to protect the rights of individuals who are participating in securities trading. Recent history has shown, however, that financial institutions will sometimes skirt these laws, causing damage to those engaged in securities trading through them. In addition to the trading of securities, lending practices can also be an issue.

  • Predatory Lending: In the aftermath of the financial crisis, the government has taken a number of steps to limit what it terms “predatory lending”, wherein a financial institution lends money to individuals with expectation that those individuals will not be able to make good on the loan’s terms.
  • Lack of Compliance: Financial institutions must adhere to the regulations that govern them; otherwise, their clients’ finances can be put at risk. In cases where a financial institution has fallen out of compliance with regulations, a class action lawsuit can result.
  • Malfeasance: In some cases, financial institutions have engaged in behavior that has put their clients’ finances at substantial risk. If a number of clients are affected, a class action lawsuit can result.

When a financial institution engages in an activity or behavior that puts a number of its clients’ portfolios at risk. Those clients can use a class action lawsuit to seek relief.

Other Types of Class Action

The above are the major forms of class action lawsuits, but there are others. For example, there have been noteworthy civil rights class action lawsuits, employment class action lawsuits, and even environmental class action lawsuits. All that is required is that there is a class who has been negatively affected and an institution or entity that is (or could be judged to be) responsible.