How a claims administrator can provide the right support for your class action settlement

The journey doesn’t end after you’ve reached a settlement in your class action. As counsel for the plaintiffs or defendants, you may have secured a payout for the potential claimants or class members, but you now have many new factors to consider — such as the most effective way to structure and execute the terms of the settlement agreement.

A claims administrator can help you to structure the payout, notify and verify potential class members, administer the claims process, complete payments to proven class members, and provide comprehensive reporting through each step of the process. They can also provide guidance to ensure compliance with the court-approved terms and that the process meets the needs of all stakeholders in the settlement lifecycle.

What is a class action?

A class action is a type of lawsuit where one of the parties represents a group of people who have all been aggrieved in the same way. For example, if a grocery store sold contaminated produce to its customers, all of the individuals who purchased that produce could be represented as one party in a class action against the grocery store or the produce provider.

After the class action is certified by the court, the plaintiffs and defendants will either work towards a settlement or take the dispute to court if an agreement cannot be reached.

However, the process doesn’t end when you arrive at the settlement stage. There are many additional factors to consider during the settlement lifecycle, such as identifying eligible claimants, streamlining the delivery process, and distributing the payout in accordance with the terms of the court-approved settlement agreement.

What happens during the settlement lifecycle?

Settlements can range from a simple payout where each claimant receives a flat amount to a complex, multi-tiered settlement where claimants receive different amounts based on the severity of the harm they suffered or quantifiable damages they claim.

The settlement lifecycle begins after the settlement has been approved by the court. It requires comprehensive planning, delivery, and reporting to meet the needs of all stakeholders involved in the process. As legal counsel, you will now need to identify potential claimants as well as structure and execute the settlement to meet all the terms outlined by the court-approved settlement agreement.

No matter how simple or complex your settlement is, you can benefit from having a claims administrator guide you through the settlement lifecycle. A claims administrator acts as an impartial third party and will work with every stakeholder involved in the class action — including the class members, the defendant, and the court.

More specifically, a claims administrator can provide:

Planning

A claims administrator can assist you with structuring the payout mechanism in your class action settlement. They will also act as an independent third party to identify potential claimants and determine the eligibility of their claim to be included in the settlement distribution.

Some claims administrators can streamline this step of the process by building an online claim portal or preparing a register of Frequently Asked Questions (FAQ) for potential claimants.

Delivery

A claims administrator will execute the terms of the court-approved settlement agreement. They can also provide additional benefits to streamline the delivery process.

Some of the ways a claims administrator can make the delivery process more efficient and accessible include creating a user-friendly digital interface for claimants, creating a bilingual web application, or by contracting bilingual qualified claims analysts to assist with the process.

Reporting

A claims administrator is considered a court officer for the purposes of class action claims and must fulfill their reporting duties to the court. They will prepare clear, concise, and secure communications throughout the settlement process — from interim reporting to counsel and the court as required, to a final report on the claims administration to the court.