Archive for May 20th, 2009

Thanks to Dan Trudeau of Rust Consulting for recommending a useful article authored by his colleague Tiffaney Allen entitled Anticipating Claims Filing Rates in Class Action Settlements.  The article is dated November 2008, but it was new to me.  The article provides only a basic summary of the many factors that can impact settlement claims rates, but it is a good primer for anyone unfamiliar with the claims process in a class action settlement.

Claims filing rates, or “take” rates, in class action settlements will vary on a variety of factors, as Allen’s article points out.  These factors include the amounts available, the clarity of the notice, the ease of making a claim, the structure of the settlement, the make-up of the class itself, the geographic area covered by the settlement class, and many other variables. 

Insiders sometimes throw around the figure 10% as generic rule of thumb for how many claimants are expected to make a claim for benefits in a typical claims-made or common fund settlement, at least in consumer class actions.  But the reality is that the claims rate can vary significantly depending from case to case.  It is possible in some cases and with appropriate expert guidance to predict claims rates with reasonable accuracy.  However, lawyers and their clients who enter into a class-action settlement with the over-simplified assumption that class members will claim only $.10 on the dollar do so at their peril.

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