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Civil Litigation

Class action opt-outs a growing trend

Opting out of a class action is sometimes the best strategy for potential claimants, Toronto civil and commercial litigator Darryl Singer tells AdvocateDaily.com.

Singer, who heads the Commercial and Civil Litigation Practice Group with Diamond & Diamond Law, says many consumers see membership in a class action as easy money or an unexpected windfall.

And while there is no doubt class actions serve access to justice, the reality is that only a tiny proportion results in significant payouts to individual members, Singer says.

“It works well for lawyers who may be getting millions in fees, but class members don’t typically get a large amount of money,” he says. “Whenever a person has suffered real, direct injuries or there are claims for things like income loss, then opting out can often be the better way to go.”

According to Singer, individual claimants in product liability cases should take care to study the alternatives for going it alone, since the severity of injuries can vary widely across class members.

Some of his clients were initially members of classes in cases alleging malfunctions of medical devices, such as hip or breast implants, but opted out due to the impact the injuries had on their lives in terms of lost income and medical care.

While the typical payout for class members is between $10,000 and $30,000, he says those who decide not to take part gain the ability to sue for fair compensation and also take some control over the litigation process.

Another of his clients opted out of a medical device class action where each member is set to receive $170,000. However, Singer's client has accumulated alleged out-of-pocket and lost income damages worth more than $500,000.  

"She had 10 years left in her working life, but she's never going to go back to making as much as she did before," he says. "Even at $170,000, she would not be recovering anywhere near what she should, had she not opted out." 

On the flip side, he says plaintiffs lose the convenience of membership in a class, where nothing is expected of involved individuals, except for the representative plaintiff.

“All you have to do as a class member is contact the law firm handling the action, and give them your name and contact number. Then, once it settles, you send in some information to the administrator, and they’ll determine your entitlement,” Singer adds.

Still, he says the extra hassle associated with examinations for discoveries and a potential trial as a result of going it alone will be worth it if the person’s damages are likely to exceed what they can expect as a member of the class.  

Singer says the process for opting out of a class action is simple. The law firm with carriage will set a deadline, and individual members just need to deliver a form by that date, informing the firm of their decision to leave the group.

“Lawyers typically act for those who opt out on a contingency basis, so there is no access-to-justice issue. The lawyer’s fee comes out of any recovery, so they don’t have to put up any of their own money,” he explains. “In the last couple of years, I’ve starting to see more and more people opting out and filing their own claims.”

Singer says individual claims will often run parallel with the class action. In many of his own cases, he has found class counsel helpful in sharing information from the main action that may be beneficial to his clients.

“We work closely together,” Singer says. “We’re all on the same side in the end.”

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