When a class member learns that they are part of a class action, they often wonder what that means in terms of compensation and their potential claim.
Class actions often deal with complex issues, and it can take many years for the action to be resolved. When the action is resolved by way of settlement or monetary judgment in favour of the plaintiff, those funds are usually distributed directly to eligible class members. As with the contested litigation, the distribution of funds can be a complex task that may take multiple years to complete. It involves verifying eligible claimants, calculating individual payouts, and ensuring compliance with court orders. In many cases, this distribution process can take several additional years after the settlement is approved.
What is a class action settlement?
A class action settlement is a legal agreement that resolves a class action lawsuit. In a settlement, the defendant agrees to provide compensation to the class members, often in the form of monetary payments, coupons, or other remedies. Settlements are typically subject to court approval to ensure that they are fair, reasonable, and adequate for all eligible claimants.
How are class action settlements distributed?
Typically, class counsel develops a protocol for the distribution of settlement funds to class members. Depending on the type, size and complexity of the class action, experts may be engaged to help design the distribution protocol. The distribution protocol governs who may claim for funds, what the requirements are for a claim, and the relevant deadlines. The distribution protocol must be court-approved. Ensuring compliance with the protocol is essential to receive your share of the settlement or judgment.
Details about the proposed distribution are typically disseminated in a notice to class members. If you received a notice about a class action distribution and you disagree with the proposed distribution, it is important that you raise your objection by the deadline stated in the notice of distribution so that your objections can be put before the court at the approval hearing. If you have any questions about this process, you should contact class counsel. Working with experienced class action lawyers ensures your rights are protected and maximizes the likelihood of receiving the compensation you are entitled to.
The role of claims administrators
After a distribution protocol is approved by the court, the settlement funds are then typically distributed to settlement class members by a third party appointed by the court. The third party, known as a “claims administrator” oversees the claims process and distributes funds in accordance with the distribution protocol. For this reason, you should not be surprised if you receive communications from this third party rather than class counsel.
How to file your settlement claim
A further notice will be disseminated with information about how to file a claim for your class action settlement. It is crucial that you follow these directions carefully and submit your claim within the specified deadline, as late or incomplete claims may be denied, potentially forfeiting your right to class action compensation.
Documentation required
Usually, proof of purchase or some other supporting documentation is required to file a class action claim. The type of documentation required varies based on the nature of the allegations.
If the case involves personal injury, you should:
- Keep a detailed record of medical expenses incurred — including appointments not covered by your provincial health care provider, prescriptions, medical devices, rehabilitation costs, out-of-pocket expenses, etc.
- Keep a record of all medical treatments received, including the names and contact information of the health care provider (doctor, surgeon, physiotherapist etc.).
- If possible, keep a journal of symptoms and record any time when you are unable to attend work or school as a result of your symptoms.
- Contact your health care providers to obtain relevant medical or pharmacy records. Class Counsel may be able to assist with this process of obtaining health records.
If you are a family member of the class member in a case concerning personal injury, you should keep a record of:
- Any expenses reasonably incurred for the benefit of the injured class member.
- Travel expenses incurred in visiting the class member during his or her treatment or recovery.
- Any caregiving or support services provided for the class member as a result of the injury (i.e., nursing, housekeeping).
- If the class member is deceased, record any funeral expenses reasonably incurred.
In some cases, no proof of purchase, receipt, or payment documentation is required to submit a class action claim. These are often cases where the defendant has already provided information to the claims administrator to allow them to assess claims. Alternatively, some distributions permit nominal payments (usually around $20) to be made to consumers without proof of payment. This typically applies in large-scale consumer class actions, where individual proof of purchase is difficult to obtain.
Cy pres distributions
In some rare cases, for example where distribution to individual class members is impracticable, money may be distributed cy pres. These are distributions to charities that are meant to indirectly benefit class members. They help ensure that settlement funds still serve the purpose of the class action, even if direct compensation isn’t feasible. To learn more about cy pres distributions, read our posts titled Cy-prés distributions – Honouring “as close as possible” and Cy Pres Settlements (Or, How Charities Can Benefit From Class Actions).
Tips to secure your class action compensation
Class action timelines are long – it may take several years before compensation, if any, occurs. That’s why we recommend taking the following steps to protect your right to compensation:
- Maintain and organize all relevant documentation. Keeping detailed and accurate records helps ensure that your claim for compensation can be verified quickly once distribution begins.
- Keep a look out for notices or settlement updates, which are usually sent by email, mail, or posted on the official class action settlement website. Follow all instructions and deadlines outlined in these notices to avoid missing your opportunity to receive compensation.
- If in doubt about your eligibility, required documents, or the claims process, contact class counsel or the claims administrator for assistance.
How Siskinds can help
Siskinds Class Action Team has extensive experience handling complex actions in a wide range of areas, including pharmaceutical and medical devices, consumer protection, securities, price-fixing, environmental, and human rights and institutional abuse. If you have been the victim of a large-scale wrong, please call 1-800-461-6166 for a free consultation.