In traditional lawsuits, one party sues another party. Class actions lawsuits group plaintiffs or defendants to cover a broad spectrum of acts against victims of a civil wrong. Not every loss of investment justifies legal action since the court takes personal responsibility and investment risk into consideration when deciding on disputes. Therefore, a strong case has credible and sufficient evidence that the objective of the defendant was to defraud his victim(s). But even then, the alleged fraudster needs to have traceable assets or other liquidity that can be seized or forfeited and eventually paid to the victim(s).
Fraudsters can be stopped by civil or criminal action. Criminal action is the sole domain of governments. However, in some jurisdictions, civil parties are allowed to join in a criminal case and be reimbursed via government efforts. In purely civil matters, the indication of the burden of proof is lower than in criminal cases. In civil cases, the court can order confiscation, compensation of damages, and penalties or fines. There must be causality between the lost asset and the crime, while only the defrauded asset can be returned in property based systems. Value based systems allow the plaintiff to seize any form of asset of the fraudster in an equivalent value for the experienced damage.
There is a distinction in consumer class action and mass tort class action. These types of civil action follow a different strategy to achieve the same outcome: mass compensation for a group of victims. Not all collective actions require involvement of the court to settle a dispute. Alternative Dispute Resolution, Mediation and other amicable arrangements can avoid lengthy trials while closing the conflict. Where financial compensation is the objective of the collective action, an out of court settlement can bring the desired result for the victims.