Corporations paid $5 billion to settle shareholder class actions last year, a sum more than triple that of 2017, and more of them are resolving for larger amounts, according to a report by Cornerstone Research.

The annual report found that there were 78 securities class action settlements in 2018, three fewer than in 2017, but five surpassed $100 million, including the $3 billion deal with Brazilian energy giant Petrobras. More significantly, the average settlement tripled to $64.9 million, when compared to 2017, exceeding the average over the past nine years and reflecting a trend toward larger settlements overall. In fact, the report found that 32 cases settled between $10 million and $49 million in 2018.

“These higher dollars aren't just driven by a small number of very large cases,” said Laura Simmons, senior adviser of Cornerstone Research, which teamed up with Stanford Law School Securities Class Action Clearinghouse on the report. “In this case, we actually had an upward shift in the size of the typical case.”

Not only was the average higher, the median settlement value more than doubled from 2017 to $11.3 million, according to the report. Also, the number of settlements valued at less than $5 million declined by nearly 40 percent from 2017.

“It was the first year since 2010 in which more than half of the settlements exceeded $10 million,” Simmons said. “We really had a shift towards larger cases.”

The report also looked at the settlement values as a percentage of alleged shareholder damages, referred to as “simplified tiered damages.” In 2018, the median settlement as a percentage of “simplified tiered damages” increased to 6 percent, compared to a 5.1 percent median for the past nine years.

That had less to do with the strength of the cases and depended more on the size of the defendants, Simmons said. The corporate defendants settling the cases were 50 percent larger than in 2017, according to the report.

“Probably plaintiffs are targeting larger firms,” Simmons said. “Plaintiffs' lawyer firms choose who they target, and it's a business for them, so they're focusing on larger cases with larger settlement amounts. They generally receive a larger payout.”

The top five plaintiffs firms leading the number of last year's settlements were The Rosen Law Firm in New York; San Diego's Robbins Geller Rudman & Dowd; New York's Bernstein Litowitz Berger & Grossmann; Glancy Prongay & Murray in Los Angeles; and Pomerantz in New York.

As part of a new collaboration with Stanford Securities Litigation Analytics, Cornerstone Research added data on what stage the case was at when it settled. From 2014 to 2018, the highest median settlement value—$36.5 million—came after a motion for summary judgment had been filed but not ruled on.

In 2018, 21 percent of the cases settled within two years, according to the report. Those cases also had the highest attorney fees as a percentage of the settlement.

The report mirrors the findings of NERA Economic Consulting's research on securities class action settlements in 2018 and comes as filings of securities class actions hit record highs.