Class actions are regularly resolved by way of settlement. A settlement is a legal agreement that resolves a lawsuit without the need for a full trial. Unlike settlements in other types of litigation, class action settlements must be reviewed and approved by the court. This ensures the settlement is fair, reasonable, and in the best interests of the class. Once approved, the settlement is binding on all class members who did not opt-out of the action. If you disagree with the terms of a class action settlement, the distribution of funds, or the attorney fees proposed by class counsel, you have several legal options to consider before the court’s final approval.
What information is included in a class action settlement notice?
Prior to the settlement approval hearing, class members are provided with a court-approved notice that includes:
- A detailed description of the proposed settlement
- How the settlement funds will be distributed among class members
- Class counsel’s proposed legal fees and expenses
Can I disagree with a class action settlement?
Yes, you can disagree with a class action settlement. Class members have the right to raise concerns if they believe the proposed settlement is unfair. Before the court grants final approval, you have an opportunity to make your disagreement known through the objection process outlined in the court-approved notice.
It’s important to review the notice carefully and act within the deadlines provided, as once a settlement is approved by the court, it becomes legally binding on all class members who did not opt out.
Legal options if you disagree with a class action settlement
Class members who disagree with a class action settlement, distribution of settlement funds and/or proposed fees have several options:
1. Contact class counsel
Speaking with class counsel is a good first step if you have questions or concerns. Sometimes the rationale for the settlement is not clear in the notice of hearing and can be easily explained by class counsel. Class counsel can provide valuable information about the settlement process, your rights, and what the proposed terms mean for you.
2. Opt-out of the action (if the deadline has not passed)
Class members are provided with one opportunity to opt-out of a class action, meaning you have a limited window of time to decide whether you want to remain part of the lawsuit or pursue your own legal claim. If the opt-out deadline has not yet expired, you may wish to opt-out of the class action. If you opt-out, you will not be eligible to receive any money or other benefits from the class action; however, you will be able to start your own case against the defendants.
3. Object to the settlement
Class members have a right to object to class action settlements. The process for raising objections is usually described in the notice of settlement approval hearing. Typically, class members are required to file a written objection by a certain deadline and indicate whether they wish to appear at the settlement approval hearing. If you are unsure about the process, you should contact class counsel.
Can individual class members appeal a class action settlement?
No, individual class members cannot appeal a court-approved class action settlement. In Bancroft-Snell v Visa Canada Corporation, 2019 ONCA 822, the Ontario Court of Appeal determined that individual class members do not have standing to appeal a settlement approval decision. As such, objecting class members should make sure to make careful use of their right to object at first instance. While it is not required to raise an objection, some class members may choose to retain their own counsel (typically at their own expense). Class members may also be able to seek assistance from online resources.
How to decide whether to object to a class action settlement
When considering whether to object to a class action settlement, keep in mind that a settlement represents a compromise between the parties and reflects the strengths and weaknesses of the case, and the litigation risks. Even in the strongest case, there is no assurance of success at trial, and pursuing further litigation can involve significant time, cost, and uncertainty for class members.
Class action settlements are designed to provide a fair and reasonable resolution for all participants, taking into account the likelihood of recovery, the costs of continued legal proceedings, and the potential benefits of a prompt settlement. If you have questions or want personalized guidance, contact Siskinds today to learn more about your rights and options in a class action settlement.