What is a class action?
A class action is a representative lawsuit that allows an individual or entity to initiate a lawsuit on behalf of other individuals or entities who are in the same or similar circumstances with respect to a given defendant. Generally, a class action lawsuit is the most appropriate legal procedure when many individuals have been similarly affected by a company's course of conduct.
How long does it take to prosecute a class action?
The time to prosecute a class action lawsuit can vary based on the unique facts, parties, and jurisdiction of a particular case. Therefore, it is not unusual for a class action to take as many as three years to complete.
What is a class period?
The class period is the range of dates within which a company is alleged to have been engaged in improper conduct. The attorneys investigating and prosecuting a particular case will review the facts of the case, and along with the court-appointed Lead Plaintiff, determine the appropriate beginning and end of a class period. Sometimes, after an initial complaint is filed, a class period will be lengthened or shortened as the investigation continues. If you purchased the securities of a company during a class period, you are automatically a class member, regardless of whether you specifically retain a law firm to prosecute any claims on your behalf. Additionally, this "class membership" concept is true with respect to consumer fraud and antitrust class actions. For example, if you purchase a product from a company that is accused of improper marketing practices during the relevant period of time (the class period), you would be considered a member of the class for the consumer fraud class action lawsuit, even if you did not personally retain an attorney.
What is a Lead Plaintiff?
A Lead Plaintiff in a class action lawsuit brought pursuant to the relevant federal securities laws, sometimes referred to as a named plaintiff or representative party, is typically appointed by the court within 90 days of the publication of a notice of the pendency of a class action. The court generally selects the class member(s) most capable of representing the interests of the "absent" class members. There is a statutory presumption that the class period investor(s) with the largest financial losses, who are otherwise typical of the "absent" class members and are adequate to represent those class members, are considered the "most adequate" plaintiff(s). Courts appoint individuals, groups of individuals, institutional investors, groups of institutions, or even combinations of both as Lead Plaintiff, depending upon the circumstances of each case. The Lead Plaintiff selects legal counsel to represent both the Lead Plaintiff and the class. Upon court approval, this counsel becomes lead counsel or class counsel in the case.
What is contingency fee litigation?
Contingency fee litigation refers to situations in which attorneys only get paid if they win the case, either at settlment or at trial. Attorneys who practice on a contingency fee arrangement typically do not receive any form of monetary payment from a client at the outset of litigation. Rather, the attorneys' fees are paid only after there is a successful resolution of the case, eiher from a settlement or judgment. There are no out-of-pocket expenses for the plaintiffs, as federal law allows attorneys operating on contingency fee basis to advance all such costs on behalf of their clients. Brower Piven handles virtually all of its cases on a contingency fee basis.
What does it cost to be involved in a class action?
Because Brower Piven prosecutes class actions on a contingency fee basis, there are no out-of-pocket fees or expenses paid by the client, regardless of the outcome of the case. If we are successful in obtaining a recovery for the class, we will apply to the court for a fee that fairly represents the work done and the risk assumed by Brower Piven. In securities class actions, attorneys' fees typically are awarded as a percentage of the relief achieved by the attorneys for the class. These percentages vary considerably based on the size of the recovery, the length and/or complexity of the litigation, and several other factors.
Will my out-of-pocket loss equal my damages?
Damages are part of a complex legal calculation that may or may not equal your out-of-pocket loss, which is a purely economic calculation. To establish damages in securities class actions, lead counsel typically hire experts to determine the extent to which a company's stock is artificially inflated during the relevant class period. Because there are often other factors which contribute to stock movement, one's damages are not necessarily equivalent to out-of-pocket loss.
Do I have to keep my stock to participate in a securities class action?
No. As long as you purchased your securities during the class period, you are eligible to participate in any recovery that the class enjoys, regardless of your current holdings. One exception is that in merger and acquisition litigation, clients may be required to retain shares until a transaction closes.