What Are the Rules for Punitive Damages in Class Action Lawsuits?

When a court finds that a defendant has caused harm, it can order punitive compensation to be paid to members of the group. Learn more about punitive damages and how they are used in class action lawsuits.

What Are the Rules for Punitive Damages in Class Action Lawsuits?

When a court finds that a defendant has caused harm, it can order punitive compensation to be paid to members of the group. Punitive damages are not meant to compensate for any losses that class members have suffered, but rather to punish particularly reckless or negligent defendants.

Punitive damages are intended to set an example and deter other parties from behaving in a similar manner as the defendant in a class action lawsuit.

There is no set number of plaintiffs needed to certify a class action lawsuit. Generally, judges will certify a class action lawsuit if there are 40 or more plaintiffs involved.

If there are 20 plaintiffs or fewer, it is likely that the class action lawsuit will not meet the numerosity rule for certification. Class actions produce the same outcome for all members, while mass grievances produce different results for people with similar claims. Critics of the law argue that it makes it difficult for some people to file class action lawsuits and lengthens the process of obtaining justice. If the court determines that the requirements for a class action lawsuit are met, it can certify the class action. If objections are filed under conditions that do not affect the collective agreement or the objector's participation in the collective agreement, the court can often approve the withdrawal of the objections without detailed investigation.

In a class action lawsuit by a plaintiff, the court would normally appoint one or more lawyers who have requested to be group counsel. Rule 23 (h) requires that notice of a motion for attorneys' fees filed by the group's lawyer be “addressed to the members of the group” rather than “delivered” to all members of the group. The member who does not request exclusion may, if they wish, appear in the lawsuit through their lawyer; however, the judgment of the lawsuit will still apply to them. In these circumstances, an action filed nominally as a class action would in practice become multiple lawsuits judged separately. Therefore, it is essential that other people have also been harmed by similar circumstances and by the same party for a class action lawsuit to be possible. Since group members have an interest in arrangements for paying group lawyers, whether that payment comes from the group fund or is made directly by another party, notice is required in all cases.

While it offers substantial flexibility, it provides a framework for appointing group attorneys in all class actions. This provision recognizes that an action can only be maintained as a class action in relation to particular issues.