For class action litigators, the hard work it takes to secure an award for their clients doesn’t end when the court signs off on a settlement agreement. Ensuring the members of the class receive their share of the proceeds requires expertise in a unique and specialized universe of regulation and market factors, along with the management prowess to effectively marshal classes that can contain millions of members and distributions into billions of dollars. Getting those funds in class members’ hands is part of an attorney’s fiduciary duty to clients—and that duty lasts until all settlement funds have been distributed so it’s critical to understand what happens following a settlement.
Not least among the important responsibilities for plaintiffs counsel is the selection of a settlement services bank and a claims administrator. The separate but closely related functions they serve assure that the funds remain secure until they have been effectively distributed. The settlement services bank, which maintains the escrow and distribution accounts, is critical not only to ensuring a smooth dispensation of the proceeds, but also to ensuring that the funds themselves remain secure throughout the time it takes to define the class and distribute the funds—typically from six months to as long as three years. Claims administrators, meanwhile, identify and notify individual class members and vet their claims to define the class and execute payments.
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