Key Takeaways:
- Class actions are lawsuits where one or a few people represent a large group or a “class” in court.
- Mass arbitrations are lawsuits that include many hundreds or thousands of people filing individual arbitrations against the same company
- Class actions and mass arbitrations’ biggest difference is that class actions are one case and many people, whereas mass arbitrations are many cases with one company.
What is a Class Action?
A class action is a lawsuit where one or a few people represent a large group (the “class”) in court. Everyone with similar claims against the same company gets grouped together under one case.
How it works:
• One case often represents thousands or millions of people
• Goes through the traditional court system
• A judge oversees everything
• Public proceedings—anyone can see what’s happening
• If you win, any amount recovered gets divided among all class members
• Usually takes a few years to resolve
What is a Mass Arbitration?
Mass arbitration flips the script. Instead of one lawsuit that includes many people, hundreds or thousands of people file individual arbitrations against the same company.
How it works:
• Each person files their own claim
• Claims are handled by a private arbitrator, not a judge
• Proceedings happen outside of court in private
• May resolve faster than a class action
• Each person can potentially recover more money individually than as part of the class
The Big Difference
Class Action = One Case, Many People
Think of it like everyone boarding one bus to get to court together.
Mass Arbitration = Many Cases, One Company
Think of it like thousands of people each driving their own car, as opposed to taking the bus.