Class Action
Overview
A class action is a legal procedure in which one or a few representatives file a lawsuit on behalf of an entire group when many people have suffered harm from the same or similar legal issues. It aims to enhance access to justice for small-claim victims who may find it difficult to file individual lawsuits, improve court efficiency, and prevent repetitive trials on the same issues. Class actions are primarily used in cases involving consumer harm, securities fraud, environmental pollution, product liability, and labor law violations.
Main Content
Types of Class Actions
- Opt-out System: Group members are automatically included unless they explicitly opt out, and the judgment binds all members. The United States is a representative example.
- Opt-in System: Group members must explicitly express their intention to participate to be included. Some European countries and Korea's securities-related class actions follow this model.
Procedure of a Class Action
1. Filing a Complaint and Class Certification: The plaintiff files a complaint, and the court reviews whether the case meets class action requirements (commonality, representativeness, adequacy, etc.) to decide on 'class certification.'
2. Notice: The court must notify group members of the lawsuit and the opportunity to opt out.
3. Discovery and Merits Hearing: Both sides exchange evidence, and a hearing on the merits proceeds.
4. Settlement or Judgment: If the parties reach an agreement, the court approves the settlement; otherwise, the court renders a final judgment.
5. Distribution: The compensation determined by judgment or settlement is fairly distributed among group members.
Key Issues
- Adequacy of the Representative Party: It is crucial that the representative plaintiff can fairly represent the group's interests.
- Common Legal and Factual Issues: If individual cases are too heterogeneous, class certification may be denied.
- Attorney Fees: Class action attorneys often receive contingency fees, which can raise concerns about excessive fee claims.
- Prevention of Abuse of Process: To curb frivolous class actions, countries strengthen certification requirements or introduce systems where the plaintiff bears litigation costs if they lose.
Comparison of Systems by Country
- United States: Has the most developed class action system, based on Rule 23 of the Federal Rules of Civil Procedure. It uses an opt-out system and is active in securities, consumer, and environmental fields.
- European Union: Varies significantly by member state, but the EU has recommendations for collective redress at the EU level. Germany operates the 'Model Case Procedure' (KapMuG), and the UK uses the 'Group Litigation Order.'
- South Korea: The 'Securities-Related Class Action Act' was enacted in 2005, allowing opt-in class actions limited to the securities field. In the 2020s, discussions are underway to expand it to the consumer sector.
- Japan: With the 2016 amendment to the 'Consumer Contract Act,' a 'Consumer Organization Litigation' system was introduced, allowing consumer groups to file lawsuits on behalf of victims.
Recent Trends
As of 2024-2025, class action systems are expanding and reforming globally. Key trends include:
- Digital Platform Regulation: With the enforcement of the EU's Digital Markets Act (DMA) and Digital Services Act (DSA), class actions against unfair practices by big tech companies are increasing. In 2024, class actions were filed against Apple, Google, and Meta in multiple countries.
- Data Privacy: Class actions for GDPR violations have surged across Europe. In early 2025, a class action worth €1 billion related to Meta's illegal collection of personal data was certified in the UK.
- Climate Change Litigation: Environmental groups and citizens are increasingly filing class actions against governments or corporations for inadequate climate change responses. In 2024, the Dutch Supreme Court upheld a partial victory for plaintiffs in a climate class action against Shell.
- Discussions on Institutional Reform in South Korea: In 2024, a bill for the 'Consumer Class Action Act' was proposed in the National Assembly but delayed due to corporate opposition. In 2025, the Financial Supervisory Service announced measures to revitalize securities class actions and is considering introducing an opt-out system.
- AI and Class Actions: The first class action related to copyright infringement by generative AI was certified in the United States. In 2024, copyright class actions against Stability AI and Midjourney are ongoing.
Related Topics
- [[Securities-Related Class Action]]
- [[Consumer Protection]]
- [[Legal Aid]]
- [[United States Civil Procedure]]
- [[Environmental Litigation]]
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