One way class action lawsuits are sometimes resolved is through a settlement. When a proposed settlement arises in a class action case, a decision comes before the different class members: whether to be a party to the settlement or to opt out.
If a class member decides to be a party to the settlement, and the proposed settlement ultimately goes through, the terms of the settlement will dictate what sort of relief they will receive.
If a class member decides to opt out of the settlement, they will not be entitled to any benefits under the settlement. They are, however, now free to pursue legal actions of their own in relation to the matter the class action regarded. This can have both upsides and downsides. This can be seen by looking at an employment-related class action case that has been in the news quite a bit lately, the NFL concussion case.
The case involves thousands of retired NFL players and relatives of deceased NFL players and regards concussions in the NFL. The class members and the NFL have reached a proposed settlement in this case. This proposed settlement has already received preliminary approval from a judge and it is anticipated that the final approval will soon occur.
There have been some opt outs to this proposed settlement. Specifically, 220 class members have decided to not be a party to the settlement. This makes up less than 1 percent of all class members in the case.
Some of the potential upsides for these individuals of now being able to pursue their own legal actions are that:
- They might be able to hold the NFL publicly accountable.
- They could potentially receive more compensation through individual action than the settlement.
The major potential downsides are that:
- They could end up losing in their individual legal actions, and thus not receiving anything.
- Their legal options could potentially be quite limited. They could be barred from litigation due to collective bargaining agreements and they could be barred from arbitration by timeliness issues.
As one can see from this, and as we talked about in a previous post, while there could be potential benefits to opting out of a class action settlement, there can also be some significant risks. Thus, individuals who are considering opting out of a class action settlement may want to speak to an attorney about their situation.