Class Action vs. Mass Tort Distinction

The fundamental distinction between a class action and a mass tort lies in whether plaintiffs are represented collectively under a single certified class (class action) or individually through separate lawsuits coordinated for pretrial purposes (mass tort). In a certified class action, a class representative litigates on behalf of all class members, and a single judgment or settlement binds everyone who does not opt out; in a mass tort, each plaintiff must independently prove causation and damages and retains individual settlement authority. This structural difference has profound litigation finance implications: class action funding typically targets common fund fee recoveries paid to plaintiffs' counsel, while mass tort funding engages both PSC-level common benefit financing and individual claim-level capital advances. The inability to certify a damages class — which courts have consistently refused for mass personal injury torts since Amchem — is the primary driver of MDL as the dominant federal consolidation mechanism for large-scale product liability litigation.

Because mass personal injury claims are almost never certifiable as a Rule 23 damages class following Amchem, funders default to MDL-style individual claim financing for personal injury dockets and reserve class-action-style common fund financing for cases where classwide damages proof is actually viable — meaning the underwriting playbook and the capital structure differ fundamentally depending on which vehicle applies. Misjudging which vehicle a given fact pattern will ultimately use is a threshold underwriting error funders work to avoid at intake.