What Is A Class Action Settlement?

A class action settlement is a resolution between disputing parties, reached either before or after court action begins. Most often, both sides opt for a settlement to avoid the legal costs, time, and the stress associated with a trial. Once a case has reached a settlement, a neutral third-party like Simpluris will handle the settlement administration portion of the case. In all settlement cases, there is compensation available to the class members because a settlement has been reached, thus of utmost importance to notify as many class. Compensation types vary from case to case, but typically include monetary compensation or a gift card. At Simpluris, settlement administration is taken care of from start to finish, with its comprehensive in-house services of notifying class members, operating the call center, response processing, and managing the fund distribution. 

There are several types of settlement cases that are identified internally by the manner that a class member can respond to the case. Depending on the case requirements, class members have different actions they must take to receive compensation. The most common settlement cases are: claims, opt-out, hybrid, dispute, and objection. 

In a claims case, class members receive a packet with a notice which contains the details related to the case, such as the lead plaintiff, defendant, lawyers, allegation(s), fund distribution, attorney fees, the terms and conditions of the settlement, and most importantly, they are given response options. They can 1) submit a claim, 2) submit an opt-out, or 3) do nothing. If they submit a claim, class members will receive a settlement award, be bound by the terms of the settlement, and give up their right to later sue the defendant about the same legal claims in the lawsuit. If they submit an opt-out, class members will be excluded from the case, will not be bound by terms of judgment, and will not receive any compensation that may be awarded. However, class members keep the right to sue the defendant separately about the same legal claims in the lawsuit. If class members do nothing, they will not receive any compensation from the settlement, will be bound by the terms of the settlement, and cannot sue the defendant about the same legal claims in the lawsuit.

In an opt-out case, class members receive a notice and are automatically considered participating unless they choose to opt-out through an opt-out form. Thus, their choices are to: 1) submit an opt-out, or 2) do nothing. If class members opt-out, they will be excluded from the case, will not be bound by terms of judgment, and will not receive any compensation that may be awarded. However, they will maintain their right to sue the Defendant separately about the same legal claims in the lawsuit. If class members do nothing, they will automatically receive compensation from the settlement, be bound by the terms of the settlement, and cannot sue the defendant about the same legal claims in the lawsuit.  

Hybrid is a combination of case types. In a hybrid case, class members can be divided into different groups, e.g. as former and current employees, based on their response options. One group might be a claims case and another group could be an opt-out case.

In dispute cases, class members have the choice to 1) opt-out, 2) dispute, or 3) do nothing. In this case type, there may be some information that wasn't entirely clear so class members would receive a form with information that they need to verify or dispute, such as number of weeks worked, paychecks received, or shifts covered. 

In any settlement case type, class members can object. Class members who object to the terms of the settlement must provide the court with a detailed written objection stating why they do not agree with the settlement. They typically must state the class member’s personal information such as their full name, address, telephone, social security number, and the basis for their objection. Ordinarily, objections are heard at the final fairness hearing; however, it is within the discretion of the court to allow hearings on objections prior to the final hearing.