Class actions are civil lawsuits based on personal injury, and attorney fees follow the general formula that you see in injury lawsuits – contingency fees. The attorney only gets paid if they win the case. If they win, they get take their fee out of the amount they were able to get for their client or clients. If they lose, there is no fee.
In a class action, the fee might be a percentage of the lump sum the attorney gets for the class. It also could be negotiated with the defendant as part of the settlement. Either way, the judge has to review and approve the attorney’s fee in a class action case.
In a class action, there is a lead plaintiff and a lead attorney. The attorney works with the lead plaintiff on the case. The others in the class generally don’t get involved in the litigation, which involves gathering evidence, giving testimony, attending hearings and trial and participating in settlement discussions and negotiations.
Because class action attorneys work on a contingency basis, the lead plaintiff does not take on any financial risk by being the representative of the larger class. The lead plaintiff will be named on the case and is technically the one filing the lawsuit, but the lead attorney should cover filing fees and other administrative costs. This is typical of most large injury lawsuits.
There has been some controversy over attorney fees in class action lawsuits. For a large class, each individual settlement amount will inevitably look small next to the legal fees, but keep in mind the fees are based on the lump sum settlement for the entire class. The attorney is essentially representing all of the plaintiffs. And the fact remains that these individuals need an attorney and a successful class action in order to go up against a large defendant in the first place. Going up against a national or multi-national corporation simply isn’t possible for the average consumer.