Guide to class action settlements and notice

Class action litigation can take several years to resolve and reach a potential settlement. If you are a potential class member, staying informed throughout the class action process is crucial. Signing up to receive notice about the class action from a law firm is a good way to stay informed on important updates and developments as the class action progresses. Leading class action law firms like Siskinds LLP (and most other class action law firms) have webpages dedicated to each class action and an online form that you can complete to sign up for notice. 

Those notices may contain deadlines for filing claims or participating in the settlement.  It is important that you review the notices carefully.  If you have questions about the notice, you can contact the relevant law firm using the contact information listed in the notice. 

Topics covered:

• What are the different types of notice?
• How to find out if a class action lawsuit is legitimate?
• Class action settlements
• What are my options in respect of a class action settlement?

What are the different types of notice?

Notice of certification

Notice of certification indicates that a judge has determined that the case can move forward as a class action (i.e., that the case was certified as a class action).  The notice of certification will state the certified class (the people included in the class action) and the common issues (the legal and factual issues that will be determined as part of the class action litigation).

The notice of certification will also advise of the right to opt out. This means you can exclude yourself from participating in the class action, which may allow you to pursue an individual lawsuit if you choose. The notice will include a deadline by which the class member has to opt-out. Typically, this deadline is 60-120 days following the issuance of the notice.  The notice will also describe the steps required to submit an opt-out request, which may require the submission of a completed form or a written request to opt out.

If you have questions about whether you should opt out, you should speak with a lawyer. You can speak with class counsel or your own counsel to determine what is right for you. For further information on the opt-out process, check out the blog post by Linda Visser, a class action partner at Siskinds LLP, titled “What Does It Mean to ‘Opt-Out’ of a Class Action?” which explores the benefits and drawbacks of opting out.

Notice of resolution of the common issues trial

A common issues trial refers to the legal process by which the court rules on the common issues affecting multiple plaintiffs or defendants. This notice provides information regarding the outcome of the common issues trial.  Assuming the plaintiff is successful in providing the common issues, this notice will also explain the process for the determination of any individual issues.  Individual issues may include issues on causation or damages.  For example, in a pharmaceutical class action, the common issues trial will determine whether a particular medical device can cause a particular medical complication.  The individual issues determination will determine whether an individual’s medical complication was caused by that medical device and the damages suffered by the individual.  By separating common issues from individual issues, courts can efficiently manage complex cases and provide a clearer framework for class members seeking justice. 

Notice of settlement approval hearing

A class action settlement, if approved by the courts, will be binding on all members of the class action. As a result, it is necessary to give class members notice of the settlement approval hearing.

The notice of settlement approval hearing will disclose key information, including:

1. the basic terms of the settlement;
2. information about the proposed protocol for the distribution of settlement funds to class members.  The protocol will include information about how the funds will be distributed and the process for applying for settlement funds.  In a case with multiple defendants, the settlement funds may be held in trust pending further settlement(s);
3. information about class counsel’s proposed fees in respect of the settlement;
4. class members’ rights to make submissions to the courts about the settlement, proposed protocol, and/or proposed fees.  See below for more information; and
5. if the opt-out period has not already run, information about class members’ rights to opt out of the class action. 

Notice of settlement approval & claims process

If the class action settlement is approved by the court, a formal notice of settlement approval will be published online and in legal notices, advising of the approval.  The notice will include:

1. the basic terms of the settlement;
2. information about how the settlement funds will be distributed; and
3. the process and deadline for applying to receive settlement funds. 

It is important that you file a claim will all supporting documents on or before the claims deadline.  Failure to meet the deadline may result in your claim being denied.  To maximize your chances of receiving funds, make sure your claim is complete, accurate, and submitted through the official settlement portal or mail-in process.

How do I tell if a class action settlement is legitimate or fraud?

Finding out that you are entitled to unclaimed money or compensation can be exciting. If you receive an email or notification that you are entitled to funds flowing from a class action settlement or if you see an online ad about a class action distribution, it is important to remain vigilant to assess for potential fraudulent activity. 

There are several steps you can take to ensure a class action distribution is legitimate and to safely claim your settlement money:

Consider why you are receiving the message.

Did you sign up for a law firm’s contact list about the class action? Are you a member of a group or organization connected to the subject matter of the class action? Is this your first-time hearing about this class action? Understanding the source of the message can help you verify its legitimacy and determine whether you may be entitled to participate in the class action. 

Assess for vagueness.

A message or notification about a class action settlement should not be generic or lacking in detail. The notice should include comprehensive information about the litigation history, the parties involved, the terms of the settlement, and the process and deadline for applying for settlement funds.  Or should refer you to a website that has this information, where recipients can also access detailed settlement documents, frequently asked questions, and instructions for submitting claims. 

Identify the sender

Note the name of the entity sending the message. This may be a law firm, a third-party claims administrator, or the defendant corporation.  Does the email address appear legitimate?  Are there spelling errors in the email address?  Is the email address a random collection of letters and/or numbers?

Verify the claims administrator

Go to the claims administrator’s website. Does the website appear legitimate?  Does the website list the class action among its active administrations? 

Additionally, search for information about the claims administrator online.  Is there other information supporting this is a legitimate company? 

Go to the settlement website. 

Does the website appear legitimate?  Does it post important documents, including copies of the settlement, the protocol for the distribution of the settlement funds, and court orders approving the settlement? 

Review the law firm and lawyers on the case. 

The notice and/or settlement website should contain information about the law firm that prosecuted the class action. 
a) Go to the law firm’s website.  Is there information about the class action posted on their website?  Do the lawyers listed on the notice exist on the website?  Search for information about the law firm and/or lawyers online.
b) Contact the law firm pursuing the class action to confirm whether the class action exists and has settled.

Conduct online research about the settlement.

Search online for information about the settlement.  Sometimes the media posts articles about class action settlements. 

Additionally, search online for any reports of known scams or fraudulent activity connected to the message received or links within the message.

Beware of high-pressure tactics.

Be alert to high-pressure techniques urging you to act quickly. Typically, messages or notices about a class action settlement should provide you with information and a deadline by which you need to act. While it is important not to miss a deadline to protect your legal rights, you should be wary of language urging you to act quickly for fear of missing out.

Check the URL and hyperlinks associated with the message.

Ensure the links within the message do not redirect you to suspicious-appearing websites or websites that appear to be emulating a known and trusted site. These types of fraudulent websites or forms may contain spelling or grammar mistakes or language that seems to be “off”.

Consider the personal information requested 

Be wary of the information being requested as part of the claims process.  The claims process should not ask that you provide banking or credit card information, or your social insurance number.  There is no need to ask for this information.  Claims are typically paid by e-transfer or cheque. 

Class action settlements and court approval

Class action settlements, if approved, are binding on class members.  Class action settlements will typically include a monetary payment for the benefit of the class in exchange for a release and dismissal of the claims at issue in the class action.  

Class actions settlements must be approved by the courts. Typically, a class action settlement includes a monetary payment, which is distributed among the eligible class members, in exchange for a release and dismissal of the claims at issue in the lawsuit. In determining whether a settlement ought to be approved, courts consider whether a settlement is fair, reasonable, and in the best interests of the class.

Factors courts consider when approving a class action settlement 

1. the likelihood of recovery or likelihood of success;
2. the amount and nature of discovery, evidence or investigation;
3. the proposed settlement terms and conditions;
4. the recommendation and experience of counsel;
5. the future expense and likely duration of the litigation;
6. the number of objectors and nature of objections;
7. the presence of good faith, arm’s-length bargaining and the absence of collusion;
8. the information conveying to the court the dynamics of, and the positions taken by, the parties during the negotiations; and
9. the nature of communications by counsel and the representative plaintiff with class members during the litigation.

As part of the settlement approval hearing, the court may also be asked to approve a protocol for the distribution of settlement funds.  The protocol will explain how the settlement funds will be distributed and the process and deadline for applying to receive settlement funds.  The courts will consider whether the protocol is fair and reasonable.

Additionally, the court may be asked to approve class counsel’s fees in respect of the settlement. For more guidance on understanding your rights as a class member and the options available, Ellen Yoo, a class action lawyer, provides more details in her blog post titled “I’m affected by a class action: what are my options?“

What are my options in respect of a class action settlement?

You have several options in respect of a class action settlement:

1. Opting out of a class action: If the opt-out period has not already run, you can exclude yourself from the class action. 
2. Objecting to the settlement: If you have concerns about the settlement, the protocol for the distribution of the settlement funds and/or the fee request, you can make submissions to the court (often referred to as “objecting”).  The notice of settlement approval hearing should describe the process and deadline for objecting. Generally, you are required to provide a written submission and indicate whether you intend to appear at the settlement approval hearing.  The process of objecting does not require legal counsel (although, a class member could choose to retain their own legal counsel if they wished).
3. Attending the settlement approval hearing: You can but are not required to attend the settlement approval motion. Increasingly, these are being held remote via Zoom.  The Ontario Bar Association Class Action Bench Bar has prepared an information sheet for class members attending a settlement approval hearing.
4. Taking no action: You can do nothing.  Once the settlement is approved, a further notice will be published regarding the deadline and process for applying for settlement funds.

Understanding your rights as a class member is crucial in any class action lawsuit, including knowing when to opt out, object, or apply for settlement funds after approval. 

The importance of consulting class counsel 

All cases pose different potential risks and you should consider speaking with class counsel. Similarly, all cases have strengths and weaknesses. No case is guaranteed success at any stage of the litigation or in settlement discussions. Settlements represent trade-offs from both sides. Discussion with class counsel may provide more context for how the settlement was reached and provide insight as to the amount of the settlement and how the settlement funds are being distributed.