Some class action settlements do not allow Class Members to claim all the money that was set aside. Money may still be available in the settlement fund even after awards have been paid. There are many reasons for this. One reason money may remain in the settlement fund after awards are disbursed is because not enough eligible Class Members have filed claims, or they were difficult to locate. Or claims that were filed were less valuable than expected.
Top Class Actions readers often wonder what happens to the unclaimed settlement money. This question will depend on the specific class action settlement and the settlement agreement will answer it. It is quite common for there to be money left over in the settlement fund once claims have been paid. This will usually be addressed by the parties during negotiations.
What can You claim?
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The additional settlement funds are typically distributed in one or more of these three ways:
- Payments to class members. Unclaimed funds may be disbursed to Class Members who have filed claims in some settlements. These payments are often sent as a second check and surprise Class Members who have previously received payment through a class action settlement.
- Cy Pres Distribution. Unclaimed funds in other settlements will be given to charity, non-profit organisation, or university for the purpose of advancing the settlement’s policy goals. Cy pres can be translated to “as close as possible” in class action lawsuits. It is often viewed as an option that benefits Class members and prevents settlement money from going back to the defendant.
- Reverts to the Defendant. Unclaimed settlement funds may be reverted to the defendant in some cases.
The official settlement agreement must be approved by the court as fair, reasonable and appropriate. It will show you how the parties agreed to handle unclaimed funds. You can file an objection to the court if you are not satisfied with their plans for disbursement of unclaimed funds. You can find the settlement administrator’s website as well as the settlement agreement with the instructions for lodging an objection before the deadline.