Is Class Action Right for You?

For investors who lost their shirts because of corporate misdeeds, a class-action lawsuit may look like a good way to recoup some money. So is it worthwhile to join a suit?

It depends on your expectations. While joining can be as easy as shipping off paperwork and waiting for a check, it can take a long time to get a verdict, and settlements are typically just 2% to 10% of a plaintiff's estimated damages, according to Cornerstone Research.

"When cases are settled, there's usually a huge gap between the settlement and what you lost," said Saul Cohen, a partner in the securities practice group at Proskauer Rose. "You rarely ever get 100% of what you lost, so most people should count anything they get back as found money." ...