What is a class action settlement administrator?

What is a class action settlement administrator?


A class action claims administrator is a neutral third-party that handles the claims administration process in compliance with the court-approved settlement agreement.

The first step is the notification process, and therefore the goal is to notify as many potential class members as possible. This is often primarily accomplished by utilizing media publications and mailing claim packets to the names and addresses provided by the defendant’s transfer agent. Most administrators also maintain a database of brokers and nominees who are notified of every settlement and ordered to either provide names and addresses of clients who are potential class members or request a bulk number of claim packets to mail on to their clients.

Once the notification process is complete, the class action claims administrator will start receiving manually completed claim forms and electronically filed claims from financial institutions. Each claim is data entered, and documentation is evaluated to substantiate each claim. Any claim that’s deemed deficient or incomplete is notified of the claim defects and given a chance to rectify the claim. The class action claims administrator will also calculate a recognized loss according to the Court-approved Plan of Allocation to spot the population and value of eligible claims. It’s also worth noting that a perceived loss isn’t the same as a market or “out of pocket” loss.

Experienced settlement administrators interpret campaign data and analytics, monitor and mitigate fraud, offer insights to implement the plan of allocation, and far more. A class action claims administrator examines the circumstances surrounding each claim and reconciles any errors, factual inconsistencies, and other deviations that may explain the reasons for variances in claimed losses, differing awards within one class, and wrongly rejected claims.

The next step is to supply recommendations to Class Counsel of all rejected claims and everyone eligible claims and their recognized losses. Class Counsel will review these findings and make a motion to distribute with the Court.

Finally, once the Court approves the distribution, the class action claims administrator will distribute the funds to all eligible claims on a pro-rata basis.

Auditing and data integrity checks are performed along the way. If any issues arise throughout any part of the process, claims administrators could also be called upon to testify objectively in court.

The administrator can and will reject a claim entirely or partially. If a claim is partially rejected, that portion of the application will be excluded from the calculation and reduce the worth of the claim. Administrators can also request independent documentation like statements or additional data to further validate a claim. In most cases, the stipulation only requires a class action claims administrator to notify claimants once of any defects with a 20-30 day response deadline. As you’ll imagine, these defects will ultimately be subject to rejection if not addressed by the claimant on time.

Read more: Eaton Family Law Houston- What It Does Best

The goal of working with settlement administrators is to make a settlement plan that satisfies due process of law before preliminary approval, while maxi mizing class benefit, minimizing costs, and protecting brand reputation. Thanks to efficient protocols and modern technology, an experienced class action claims administrator plays a critical role in class action lawsuits from their inception to final resolution.

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