Class-action lawsuits and auto dealerships have a rather deep history, one that is rather messy, filled with high-stake settlements and negotiations. A class-action suit can pose a huge financial risk for dealerships, not to mention reputation risks for the dealership itself, all the while diverting valuable time and management that could otherwise be used building the business and selling cars. When these matters arise, dealerships will have to either settle for pre-suit resolution of class-action claims, and when a suit goes to trial, there is the possibility that a court will award damages, in sometimes staggering amounts, against a dealer.
A class-action lawsuit is different from a typical lawsuit in that a large number of plaintiffs bring suit against a defendant or defendants based on a common set of facts shared by the plaintiffs. Lawsuits drain corporate resources and can even drive a dealerships to lay off employees or go out of business entirely. In a litigious society, there is a huge benefit to lawyers bringing class actions because of the enormous fees that they can be awarded as part of the settlement, so understanding the legal challenges facing the industry is all about prevention. After all, an ounce of prevention is worth a pound of cure.
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