What is the difference between a class action and a derivative action?

Class action and derivative action are two different types of legal proceedings that are available to parties in Washington. A class action is a lawsuit that is filed on behalf of a group of people who have all suffered the same or similar harm as a result of the same conduct. For example, if a group of people were harmed by the same defective product, they could consolidate their individual claims into a single class action lawsuit. The individuals in the class action lawsuit would be represented by a single plaintiff (called a class representative) and would be bound by the outcome of the lawsuit. On the other hand, a derivative action is a lawsuit filed on behalf of a corporation or other organization. A derivative action is used when the organization in question cannot bring a claim itself due to restrictions or other limitations. In general, a derivative action is filed by a shareholder on behalf of the company, and any recovery of damages is paid to the company rather than the individual shareholder. In summary, a class action is a lawsuit that is brought on behalf of individuals who have suffered a similar harm, while a derivative action is a lawsuit that is brought on behalf of an organization that cannot bring the claim itself.

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What is the difference between a class action and a derivative action?

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