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If you own or operate a company, you may have to worry about lawsuits sometimes. Many companies will never experience one. However, if you make a product, or many different products, then one might harm someone, or several people. You will likely take all the precautions you can to prevent that from happening, but it’s still possible sometimes.

If one of your products harms several people, then you may have a class action lawsuit on your hands. You will then need to know about what determines class action lawsuit compensation amounts. You will also need to know what action it makes sense to take. 

We’ll talk about that in this article. If you’re staring down a class action lawsuit, that may feel intimidating. You’ll need to tread cautiously as you address this challenging situation. 

What Does Class Action Lawsuit Mean?

First, we should explain the term “class action lawsuit,” just in case you don’t know its meaning yet. If someone brings a civil action against you, that’s a lawsuit. It’s different from a criminal case. The police and court system may bring that against you, rather than private citizens.

If you do something wrong, you may face both criminal and civil charges. However, you can deal with those separately. We’ll focus on civil charges in this article.

A single person, called a plaintiff, might sue you, bringing a civil action against your company. In a situation where your product harmed or even killed several people, though, they might band together to file a class action lawsuit. 

This means they’re all suing you as a single block. If your product killed someone, or multiple people, then their relatives will usually file suit on the deceased party’s behalf. 

If several individuals bring a class action lawsuit against your company, then they may all have a separate lawyer representing each of them. They may also have just a single lawyer or law firm representing all of them. 

Either way, you must take this situation seriously. You might have millions of dollars on the line in these cases if you end up settling or losing a jury’s verdict.

If you settle with the plaintiffs or lose a jury’s verdict, then you will probably have to pay a certain amount of money that the plaintiffs divide among themselves. However, bear in mind that some of the plaintiffs might accept a settlement amount, while others may not. Each plaintiff can make their own decision on that.

Now, let’s talk about what you should do if several plaintiffs bring a class action lawsuit against your company.

You’ll Need to Hire a Lawyer

First, you will need to hire a skilled lawyer, if you don’t have one already. Many times, a company will have an attorney on retainer already. If you own a larger company that makes many products, it makes it more likely someone will sue you at some point. Having a lawyer or entire law firm standing by frequently makes sense. 

Whether you hire a lawyer or already have one, you must speak with them about the lawsuit. Explain what the plaintiffs claim happened. You should also tell the lawyer whether you think the lawsuit has any validity or not. However, you may not know the answer to that question yet. 

You Will Need to Investigate the Plaintiffs’ Claims

If you have no idea whether the plaintiffs’ claims have any validity, then you and your lawyer will need to investigate. You might do that by testing the faulty product under lab conditions to see if it caused the harm that the plaintiffs allege. 

Sometimes, you can’t easily determine that. Other times, you can tell pretty easily whether the product has a faulty element that caused the damage the plaintiffs say happened. 

If you feel based on your findings that the plaintiffs don’t have a case, then you might decide you will fight them in court. Most times, though, you will need to think about finding another way to get out of the situation.

You Can Consider Settling

Many product liability cases, whether of the class action variety or not, never make it into a courtroom. That’s because the company owner or operator settles.

You might do this if you feel sure or reasonably sure that the product harmed the plaintiffs. You may decide to settle even if you don’t think the product did any harm, though.

You might do that because you don’t want the negative press that surrounds this whole business. If your company ends up front page news because several people say one of your products harmed them, then you may want to get that news story out of the headlines as quickly as possible, even if you don’t agree your products did any harm.

If you feel that your products caused no harm, and you’re sure you can prove that in court, then you may decide you won’t settle. If so, then you and your lawyer must prepare for a potentially long and difficult trial process. 

You Must Make Sure This Situation Does Not Happen Again

Whether you settle or not, you will need to do one additional thing. You must do all you can to make sure nothing similar ever happens again. 

Usually, that involves getting the faulty product off of store shelves. Even if you determine that the product didn’t actually harm anyone, you may still get rid of it. You won’t want the product out there if people feel it’s harmful, whether that’s really the case or not. 

You may have to track down every product in that particular line that your company sold. That’s not always easy. You can issue a recall, but if you sold millions of them, you can imagine the accompanying logistical challenges.

In the future, you must avoid making a product like that. You may also want to have more stringent guidelines in place about what products you make for public use.