Opt In v Opt Out claims - what’s the difference?
There are two types of class action, or legal disputes involving many claimants: opt in, and opt out.
‘Opt in’ class actions are claims in which potential claimants need to actively give their permission to take part. Law firms running opt in claims will typically advertise and publicise their claim to encourage people who might be entitled to take part to get in touch. If they are entitled, the law firm will sign them up and add them to the claim. If the lead claimant wins, everybody who signed up is entitled to compensation. As all claimants have given their permission to take part, the law firm running the claim has their contact details and is therefore easily able to let them know the good news.
‘Opt out’ class actions are the inverse. A lead claimant fights a claim representing a category or people. Nobody else is required to ‘sign up’ to the claim. If the lead claimant wins, everybody who meets the criteria of the claim is entitled to compensation. Any individual can, however, choose to ‘opt out’ of receiving compensation.
The UK case Merricks v MasterCard is an opt out case. Walter Merricks is the lead claimant, representing everybody in the UK who was at least 16 years old between 1992 and 2008 and also used debit or credit cards during that period. If Merricks wins, everybody who was 16 or over during that period and used a card wins too.
In an opt out case there is usually no need or requirement to contact other members of the class until after the claim has been litigated. Contacting thousands of people early would incur unnecessary costs if the case fails.
In the US, where class action lawsuits are well established, most cases are opt in. In the UK, cases brought under the Competition Appeal Tribunal regime are opt out cases. Most other forms of group litigation in Britain are opt in.
The EU Directive on representatives actions, which states that all member states must have some form of class action consumer redress system in place by the end of 2022, does not stipulate whether the systems put in place should be opt in or opt out.
You can read more about how our claims automation solution is helping law firms in both opt in and opt out claims here. Or if you would like a demonstration or to speak to a member of our team you can email or call us directly.
Questions and answers
Q: Are there any other names for class action lawsuits?
A: The most common name for legal disputes involving many claimants is ‘class action lawsuit’ or ‘class action litigation.’ However, they can also be called ‘group actions,’ ‘group claims,’ ‘collective actions,’ ‘mass torts,’ ‘group claim lawsuits,’ to name a few. Although there are various different legal regimes governing the way class actions progress, what they all have in common is that they represent many, sometimes millions, of claimants.
Q: What is the ‘collective action regime’?
A: It is shorthand for the EU Directive on collective redress which stipulates that all members of the EU must have some form of class action regime in place by the end of 2022. There are already many class action lawsuit active claims across the EU and in the UK. Due to the evolving nature of the regime, new group claims are likely to grow in number over the coming years. You can find out more about the collective action regime here.
Q: How do class action lawyers handle new group claims?
A: There is no stipulated way for class action lawyers to manage class action litigation. However, managing a case with thousands of claimants requires organisation and class action claims administration is complicated. Most lawyers will use some form of claims management software. Often, they will use a claims management platform to which claimants can upload data. In today’s data-driven world it would be hard if not impossible to run a large claim without some sort of dedicated claims system, claims handling software, or claims management website.
Q: Are class actions in England and Wales different from EU class actions?
A: The UK has its own class action regime. You can find out more about the UK class action regime here.
Q: What big group claim settlements have there been in the UK?
A: So far, all of the group claims filed under the 2015 regime at the Competition Appeals Tribunal have yet to conclude.
Q: Are new class actions common?
A: They are becoming increasingly common in the UK and parts of the EU. They have been an established part of the US system for well over half a century.
Q: What does group action software do?
A: Click here for more details of FinLegal’s claims handling software.
Q: Are class actions common in Europe?
A: They aren’t as common as in the US and Australia. Class actions in England and Wales are on the rise following legislation in 2015. Due to the EU collective action regime, all members of the EU 27 are required to have class action regimes in place by the end of 2022. New class action claims from across Europe are, therefore, highly likely. You can find out more about EU class actions here.
Q: What are some group claim lawsuit examples?
A: The most high-profile group action lawsuit in England and Wales in called Merricks v MasterCard. There are many class action lawsuit claims planned, and many active group claims in the system. It is, however, impossible to know how many there are across the region as there is no centralised database or class actions lawsuit list.
Q: What are the biggest group action lawsuit claims?
A: It depends on how ‘biggest’ is defined. Merricks v Mastercard potentially represents every adult in the UK, so millions of people. The Tobacco Master Settlement in the US was worth more than $200 billion.
Q: What are the largest class actions lawsuits/biggest group actions settlements of all time? How big are big group claim settlements?
A: As class actions involve many people, even a small per person payment can lead to a big group claim settlement. However, the biggest ever class action lawsuit was the Tobacco Master Settlement Agreement of 1998, a case brought against the four largest cigarette manufacturers in the US. The total settlement was more than $200 billion. Class action settlements, in total, are rarely small. $200 billion is by far the largest, and no other claims to date have come near that figure.
Q: Is group action software the same as claims manager software?
A: FinLegal’s claims handling software can be used by lawyers and claims managers, as well as potential claimants who can self-serve using tablets, phones and laptops. Click here for more details of FinLegal’s claims handling software.
Q: What is a claims management platform?
A: A claims management platform is a web-based software solution for managing class action litigation. FinLegal’s claims handling software can be used by lawyers and claims managers, as well as potential claimants who can self-serve using tablets, phones and laptops. Click here for more details of FinLegal’s claims handling software.