Group Claim (noun)

a lawsuit in which many people
join together to sue because they
all say they were harmed by the
same person or group


 

A Group Claim is a lawsuit with many claimants. Claimants can be either companies or individuals. Most commonly a Group Claim will initially focus on one claimant whose circumstances are representative of the others, a type of test case.

Examples of Group Claims include:

  • Franchisees against a franchisor for acting unlawfully
  • Businesses against the tax authority for wrongly enforcing tax laws
  • Purchasers against suppliers who have engaged in price-fixing and charged too much
  • Shareholders against the company they hold shares in, for unsatisfactory disclosure of information
  • Investors against a financial adviser who has broken the law.

A common theme in these cases is that although the loss can be substantial and material to each claimant individually, the costs of bringing a case together with the distraction from the day-to-day business and the technical expertise required creates an insurmountable obstacle for small to medium enterprises. For many businesses and individuals this may mean that their deserving claims will not be pursued without joining a Group Claim.