What Happens to Unclaimed Class Action Settlement Money?

Class action lawsuits have gained much ground in the recent past. This is because they provide a guarantee for compensation for a group of people who have been defrauded or injured by the same party. Class action lawsuits are filed and litigated in the federal court. When litigation ends in favor of the plaintiffs (injured person), the defendant (guilty company) is compelled by the tribunal to issue settlement funds.

Normally, the court sends the compensation directly to each class member in a check via email. In some cases, it may require the claimants to submit a formal claim form to a particular claims administrator. Some plaintiffs occasionally fail to submit these forms in time thus cannot receive their settlement money. Others fail to collect their share of the compensation because of lack of knowledge of the settlement date.

The court usually sets a duration within which the class members can claim the compensation. When the claimants fail to meet this deadline, it will categorize the extra funds as unclaimed settlement money. In a typical year, they can accumulate to over $10 billion. This makes a large fraction of the money and assets that the government owes its citizens.

You have probably wondered where these unclaimed settlement funds go especially now that class action lawsuits are becoming rampant. The court has strict policies that track the use of the uncollected compensations. Below are some ways in which it disburses these extra funds.


Share it Among the Known Class Members

Some class action settlements dictate that the outstanding settlement fees be distributed to the available class members. When this approach is adopted, the excess money is shared equally and sent in check form via email to each class member.


Donate it to Charity

The settlement funds may also be donated to charity, nonprofit organizations, or universities. The group receiving the donation must, however, have a mission that is in synch with the public policy goals of the lawsuit. For instance, the “extra funds” collected from a personal injury class action lawsuit can be donated to a nonprofit organization that tackles occupational health issues.

This kind of litigation is adopted from the trust & estate law doctrine know as cy pres. It states that if the original purpose of the settlement fund is unattainable, the money should be plowed into the second most significant use.


Reimburse it To The Defendant

In some occasions, the court may decide to refund the extra cash to the respondent according to the dictates of the settlement.


What Can You Win in Class Action Lawsuit?

Class action lawsuits allow you to join a group of people suing a company on behalf of another group with similar complaints. Most of these cases often end in settlement rather than trial. The most common mode of compensation for these lawsuits is in the form of cash. The proceeds of a class action lawsuit settlement are usually worth millions. The amount to be received by each class member depends on the number of people involved and the extent of damage incurred by each claimant.

There is also a chance that the court can rule in favor of the defendant. When that happens, the settlement funds will be sent back to the respondent. When joining a class action lawsuit, you give up your rights of filing an individual lawsuit. You can choose to opt out if you wouldn’t like to split the winnings at the end of the case. However, note that numbers give you a better chance at winning a lawsuit. This is because every complainant in the class action contributes to the strength of the evidence.

The attorneys of the involved parties are expected to discuss terms regarding the mode of compensation. However, what the plaintiff will receive is largely in the hands of the court. The jury looks into the conditions presented by the lawyers of the plaintiff and the defendant to establish whether they are fair or not. If they are satisfied, they will issue certification for the payouts to be implemented.

You can also win non-monetary assets in a class action lawsuit. In a case regarding fraudulent service, for instance, you may be awarded shopping vouchers, coupons, or discounts for purchases in the defendant’s enterprise. The court may also order the defendant, especially a business, to enforce better customer protection strategies. In cases when the defendant cannot provide the settlement funds in whole, the compensation can be recovered in terms of assets from their holdings.

Class action lawsuits may also end up in a trial. This happens particularly in complex cases with numerous interested parties. The compensation of such suits is usually massive. When the plaintiff wins the case, all the damages are distributed among the individual members under the court’s supervision. This ensures that the process is non-adversarial and addresses the individual losses of each class member.


How Long Does a Class Action Suit Take?

Class actions come in different forms. Depending on their complexity, they can take 1-3 years to resolve. Some cases can even take longer especially when the defendant files an appeal.

The class action litigation is a lengthy process because it occurs in stages. The procedure involves the formal filing of the case, certification of the case, notifying the eligible class members, evidence gathering, settlement negotiations, and approval of the settlement by the court. Each of these stages requires some time to complete.

Also, class action lawsuits are lengthy because the victims of a particular fraud or malpractice need time to join the class action. After the joining process, the case advances to the discovery stage. Here, the lawyers of the defendant and the claimant gather information that may aid in the case. They also conduct depositions of persons of interest and collect the necessary affidavits.

To complete all the stages of the litigation of a class action lawsuit, you need to wait a period not less than six months. Procedural delays, disputes from involved parties, and busy court schedules are other factors that prolong the process. When the case is complicated or involves numerous parties, the tribunal will need more time to reach a fair settlement.

Most companies often prefer to settle class action lawsuits as soon as possible. Consider a scenario where you sue a company for a case that can potentially destroy the credibility of its brand. It will be in the company’s best interest to settle the case imminently to avoid driving away potential customers. Such lawsuits may take roughly a year allowing the guilty party to rectify their situation.

In a straightforward case involving two to three groups, the settlement funds are usually rolled out 2-3 weeks after settlement. During this period, the court will cut and authorize the checks. Also, the class members are expected to file their formal claim forms to get their reimbursements. However, when the attorneys for both sides can settle quickly, the court will approve the settlement and then order the defendant to make the payout immediately.


What is a class action lawsuit?

Class action suits are civil lawsuits which are presented in court by a person or a group of people acting on behalf of a much larger group. Usually, the class action constitutes of individuals who have been injured in one way or another by a particular company. A typical scenario that calls for a class action lawsuit is when a corporation causes injury or death to a group of people or employees. During the settlement negotiations, the complainant’s counsel will push for a compensation that can help their clients have a whole normal life.

Filing of separate lawsuits is time-consuming and costly not only to the courts but also to the involved parties. Therefore, most people prefer a class action lawsuit over the typical single lawsuit. In the former, the plaintiff sues a defendant on behalf of a group consisting of 40 or more people. The represented parties do not have to attend the litigation process.

Class action lawsuits are open to anyone with a similar legal interest to the members of a particular class action. However, when you decide to join, you must sign a document that bars you from suing the company as an individual. Upon termination of the case, the damages will be awarded to class members in a specified proportion. The courts must evaluate the harm caused to each person to find out the right fraction for everyone. Documents such as medical bills can be used to estimate the exact amounts to be reimbursed to a claimant.

The class has to appoint an attorney or a law firm that will represent all the plaintiffs’ interests. Class action lawyers operate on a contingency basis. This means that their payment comes from a fraction of the settlement funds. They usually take between thirty and fifty percent as their compensation. However, when they fail to win the case on behalf of the plaintiffs, they will not levy any charges for their services.

The compensation of a class action suit is divided into two categories- compensatory and punitive charges. The compensatory charges address the damages that the defendants caused. If you suffered a serious illness at work, for instance, the compensatory damages would cover all your treatment needs including emotional distress. Punitive damages, on the other hand, are the charges by the court to the defendant as a form of punishment to discourage them from committing the same atrocities. In most occasions, these fees tend to be quite expensive.


How to Join Class Action Lawsuit

Most of the class action lawsuits are regarded as opt-out lawsuits. This implies that if a particular class action suit represents your legal interests, you will automatically be part of it unless you decide to opt out. For example, a company might have sold defective products for two years. During this period all the customers who bought the product suffer injuries and file a class action lawsuit. If you purchased the same product during the stipulated period and suffered the same injuries, you will become part of the class action lawsuit automatically.

In an opt-out suit, you will receive an email informing you about the case and the way forward. If you do not get an email, search for pending class action lawsuits online or in public records and contact the attorney or law firm presiding over the case. The attorney will investigate your case to determine whether your situation fits the desired criteria. He/she will then consider you as one of the eligible class members during settlement.

There are also other class action lawsuits know as opt-in class action. Unlike the opt-out cases, they do not add complainants into a class automatically. Rather, they advertise a notice to notify any parties that may be interested in the case to apply. To join this type of a class action lawsuit, you first need to find out whether there is a pre-existing class action that addresses your issue. You can then file a formal application to the council in charge of the lawsuit.

If you cant find a suit that fits your injury or claim, you have the freedom of starting your class action. You will, however, have to find a group of people with a similar situation before you can approach a law firm for further guidance. A good way of attracting more class members is to advertise your lawsuit on publications.

Joining class action lawsuits is free. You need not worry about the litigation fees accruing from the case. They will be deducted in the settlement fees as long as the results are in your favor. Note that you can also exit an opt-out class action if you do not wish to take part in the litigation. This can be helpful especially in a case where the complainants are so many that the compensation to be awarded seems little or insignificant.

Always ensure that you read all the rules and laws regarding the negotiations of class action lawsuits. Take note on the claiming deadlines to make sure that you don’t file a late claim.