An article published Tuesday by John D’Antona Jr. at Trader’s Magazine Online News entitled Getting a Piece of the Class Action Pie discusses a creative new idea for making a buck on class action settlements. The article discusses a service offered by a New Jersey financial technology company called LiquidClaims, Inc. According to the article, LiquidClaims has an algorithm that matches up investors with securities class action settlements, and automatically files a claim for settlement benefits on behalf of any of its clients who are class members, taking 30% of any recovery as its fee.
As far as I know, there is no common label for this type of service, but for lack of a better phrase, I’ll call LiquidClaims a “class action settlement aggregator,” since its service is essentially to aggregate settlement claims in order to create economies of scale for its clients in claiming class action settlement funds. According to its website, LiquidClaims calls itself “the leader in settlement claims optimization.”
So far, it appears that class action settlement aggregator phenomenon is limited to the securities area, but given American ingenuity, one would think that the business model will catch on in other areas as well. We’ll keep our eyes peeled for future developments.