FAQs on Class Action Lawsuits

How do I know if a class action settlement is unfair or the representation improper? Most cases where courts find a problem there usually are one or more common traits. Some of these traits include the following:

1. Coupon settlements – this is whereby manufacturers and other defendants opt to settle transactions by offering coupons to class members in lieu of paying money damages. In the meantime class action attorneys get real money for their services not coupons. As a result coupon settlements are closely examined by the courts and then examined on the fairness of the corresponding attorney’s fee agreement.
2. Intangible benefits – if class members suffered clear financial losses as a result of the defendant’s product or conduct, any settlement that is offered for something other than money will be closely scrutinized. Such intangible benefits will be assessed and valued appropriately by the court and weighed against the propriety of the class action lawyer’s fees.
3. Broad releases of unrelated conduct – if a class action claims that the defendant was engaged in very specific illegal action and the settlement agreement contains a clause of release where members give up their rights to bring any future legal this is likely to raise alarms.
4. Insufficient investigation of the case – some class actions may settle very quickly especially if the defendant is motivated to limit liability. Doing this may discourage the class attorneys from fully investigating the defendant’s liability.
5. Clear sailing agreements – according to the Indiana University Maurer School of Law, “a clear sailing agreement is a compromise in which a class action defendant agrees not to contest the class lawyer’s petition for attorney’s fees.” This is if the settlement appears too large on its face and the defendant has agreed not to object to it, plaintiffs or some class members may enquire into the reasonableness of the corresponding lawyer’s fees.