Claims Rate Issue Has Become "Particularly Acute" In Class Action Settlements

March 16, 2017

Last year, U.S. District Judge Ortrie Smith rejected a class action settlement with Remington Arms Co. for an “appalling” claims rate, also known as the percentage of potential class members who actually request compensation from the settlement, writes the National Law Journal.

Now, with the claims up from 2,327 to 22,000, Judge Smith has agreed to sign off on the settlement, but noted in his approval that he was still “disappointed in the claims rate” given that there are an estimated 7.5 million potential class members.

This ruling comes amid heightened awareness of the disparity between claims take-up rates by class members and plaintiffs' lawyer payouts in class action cases. This month, the House of Representatives passed the Fairness in Class Action Lawsuits Act which addresses this issue.