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The average shareholder class action settlement was $18.2 million last year, down 75 percent from 2016 and well below the $57.7 million average over the past two decades, according to an annual report by Cornerstone Research.

The report, released Wednesday, said that the total of all settlements was $1.5 billion, less than a quarter of total settlement values in 2016 and the second-lowest level in the past decade.

Laura Simmons, senior adviser at Cornerstone and co-author of the report, said the cases last year were just smaller.

“It is one of the largest declines we've seen over the years,” she said. “These were just smaller cases for the most part. What is interesting is how small those cases really are.”

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The report was in line with a report earlier this year of NERA Economic Consulting that found average settlement value in 2017 was $25 million, a drop of more than 40 percent from 2016 and the lowest since 2001.

The lower valuations come as the number of settlements dropped only slightly to 81, compared to 2016, according to Cornerstone's report. In fact, a Cornerstone report earlier this year found that shareholder class action filings hit record highs in 2017.

But more than half the settlements last year were $5 million or less—a number and proportion not seen in the past decade.

“There's really a substantial drop in the size of the cases,” Simmons said. “And that's driven by smaller losses in those cases. The other thing that contributed to the smaller size of case is that the defendant firms were also smaller.”

Also, for the first time in five years, there was no settlement worth more than $250 million. The highest of the four mega-settlements—those worth $100 million or more—was a $210 million deal with Salix Pharmaceuticals Ltd. that Bernstein Litowitz Berger & Grossmann handled.

But mega-settlements only made up $630 million, or 43 percent, of the total settlement value last year, the report said. In 2016, by comparison, they made up $5 billion.

Simmons said she did not expect the trend to continue, noting the $2.95 billion partial settlement with Petrobras this year.

“We already know about the Petrobras settlement and a couple of others that will drive up the total settlement dollars and are likely to increase the average, as well,” she said.

A few other trends in the Cornerstone report were:

• Institutional investors appeared less frequently as lead plaintiffs, even in larger cases. “The factors that would play into that of course are whether they are getting a benefit,” Simmons said. “There's time and effort involved for the institutions to serve as lead plaintiffs, so it comes down to a cost-benefit analysis for them.”
• An increasing number of derivative actions accompanied securities class actions. “It's surprising to see an increase in derivative actions accompanying what was by and large a set of smaller cases,” Simmons said. But it might be a business decision: “We know they're often brought by plaintiffs who vie for the position of lead plaintiff in the securities class, and then are not appointed, and still want to be part of the case, so they file an accompanying derivative action,” Simmons said. “It comes down to the way they manage their business or decide they want to be involved in more cases.”