Uneven split: Class action settlement distribution

After a long journey through the courts, the legal proceedings you joined have been successful, and it is finally time for the class action settlement distribution.

Once you know the total amount of the class action settlement, your first question is likely to be: “How much do I get?” Quickly followed by: “When will I get it?”

The answers to both depend on many factors, including the amount of the settlement, the amount the court orders be paid to the legal team and/or litigation funders, the number of people in the class action and the type of damage each individual has incurred.

Once a judgment or court-approved settlement has been made, the money is generally handled through a distribution scheme as outlined by the court.

How settlements are distributed

The court will appoint an administrator for the distribution scheme. This is often the legal team representing the lead plaintiff as they have collected the evidence related to the class action and have a good understanding of how group members have been affected.

 

 

If you have registered to be kept up to date, rather than just being a passive group member, the law firm may have asked you to provide details supporting your claim and strengthening the class action.

The court may also assign a third party, such as an accounting firm, to administer the funds. What each claimant receives will be determined on the merits, with the court providing direction for how to calculate the distribution of the settlement sum.

While a successful multi-million-dollar class action can bring a great deal of satisfaction to group members, with a sense of justice being done, that may not quickly translate to more money in the bank.

In the Robodebt class action, brought against the Australian Government in November 2019 for unlawful debt notices to Centrelink recipients, the parties agreed to a $112 million settlement on the first day of trial in November 2020. The law firm was awarded $10.3 million of that, with $101.7 million left to distribute between about 400,000 eligible group members. About half received amounts of between $50 and $300, with the Federal Court approving the settlement calculations.

In the wake of the Royal Commission into Robodebt, Gordon Legal appealed the settlement to seek further compensation, noting that new evidence was damning. The lawyers argue that at the time of the settlement, applicants were not aware that senior public officials involved in the Robodebt scheme knew it was illegal and were entitled to further damages. Since the class action was filed, more than $1.7 billion in financial benefits were provided to approximately 430,000 group members.

 

 

Getting your share of the class action settlement

In Australia, you are automatically part of a class action if you meet the group definition in the court documents, even if you don’t know about it. If you have not elected to “opt out” and have registered your interest or participation in the class action, you will be kept informed of the class action settlement.

As an interested party, you will first receive notification of the settlement amount in time to lodge an objection or make a submission if you do not agree with the amount. Once any objections have been taken into account and the settlement has been agreed, the administrator of the settlement distribution scheme will keep all parties informed of the progress of that distribution.

 

 

They will use the terms approved by the court to calculate each group member’s share of the settlement and may require some to provide more evidence to support their claim. The more information you supply as a group member when you register your interest in the class action, the less likely this is to happen.

If you are asked to register, as is the case with the marathon Ford PowerShift class action which is finally entering the settlement phase, this can help boost the overhaul settlement, as well as give you a better opportunity to outline your individual case.

The court retains oversight until all funds have been distributed and the process finalised. If you have not registered, you will be bound by the settlement but will not receive any payment.

If you think you could be part of a class action, make a complaint with us and we’ll help you handle it.