In the United States, anyone that has been harmed by conduct that is the subject of a class action has two options: Choose to remain a member of the class or opt out and bring an action as an individual plaintiff.
Having spent well over two decades in-house, I’m all too familiar with the challenges a GC faces in making the decision to pursue a claim, opt-out or otherwise. Although many factors are at play, too often one consideration—budget—trumps all. Even in the face of egregious behavior by a defendant, it is hard to justify putting limited legal budget at risk to pursue a claim that might lose. This is even more difficult in a commercial class action, where the option to remain in the class seems like the safest (and most budget friendly) option. But when a company has a valuable class action claim, it is incumbent upon a GC to carefully weigh her company’s risk and cost tolerance against the obligation to maximize recoveries—and to thoroughly examine what tools might make an opt-out strategy viable.
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