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Class Actions Guide

What Is a Class Action?

8 min readUpdated January 15, 2026

A class action is one lawsuit brought on behalf of a large group of people affected by the same conduct, rather than each person suing separately. It exists because many valid claims are individually too small to be worth pursuing alone but are significant in aggregate.

This guide explains the mechanics without the marketing. General information for Canada and the US — procedure differs by province, state and court, so confirm specifics with a lawyer where you are.

Who is in the class, and how you get there

A representative plaintiff sues on behalf of everyone who fits a defined description — the 'class'. If you fit that definition, you are generally included automatically without doing anything, which surprises most people.

That is the key structural difference from ordinary litigation. You are not a party, you do not instruct the lawyers, and you usually will not be involved unless the case settles or succeeds and a claims process opens.

Certification: the gate the case has to pass

Before a class action proceeds, a court must certify (in some US courts, 'certify' as well) that the case is appropriate to run as a group claim. Courts look at whether there is an identifiable class, common issues, and whether a group proceeding is the preferable way to resolve them.

Certification is not a finding that the defendant did anything wrong. Many cases are refused certification, and many certified cases go on to fail on the merits. Reporting that a case has been 'certified' is frequently mistaken for a win — it is a procedural threshold.

Opting out, and why you might

Class members can usually opt out within a defined window and pursue an individual claim instead. If you stay in, you are generally bound by the outcome, including a settlement, and give up the right to sue separately on the same issue.

Opting out is worth considering where your losses are substantially larger than the typical class member's — a serious personal injury, or a significant business loss. That is precisely the situation where individual legal advice pays for itself.

What you can realistically recover

Individual recoveries in consumer class actions are often modest — sometimes a small payment, a voucher, or a credit — because the total is divided among a very large class after legal fees and administration costs approved by the court.

That is not a criticism of the mechanism: its purpose is as much deterrence and access to justice as compensation. But it does mean that if your loss is significant, an individual claim may serve you far better than waiting on a class proceeding.

Frequently asked questions

Do I need to sign up to be part of a class action?
Usually no. If you fit the class definition you are generally included automatically, and you would only act at the claims stage if the case settles or succeeds — or to opt out.
Does certification mean the company did something wrong?
No. Certification is a procedural decision that the case can proceed as a group claim. Liability is decided later, and many certified cases do not succeed.
Should I opt out?
Consider it if your losses are much larger than a typical class member's, since staying in generally binds you to the outcome. This is a decision worth taking legal advice on.
How much do class members usually receive?
Often modest amounts, because the recovery is divided across a large class after court-approved fees and administration. Amounts vary enormously by case.
Do I pay anything to be in a class action?
Class members generally do not pay legal fees directly; counsel are typically paid from any recovery or award, subject to court approval.

This guide is general information, not legal advice. Laws, costs, and procedures vary by state, province, and your specific situation — speak with a qualified family law lawyer about your circumstances before acting.

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