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class action Tag

Risk Settlements > Posts tagged "class action"

Cy Pres: Is It the Land Mine Waiting to Blow Up Your Settlement

CY Pres: Is it the land mine waiting to blow up your settlement?

[vc_row triangle_shape="no"][vc_column][vc_column_text] A cy pres award or distribution is derived from the French saying of “cy pres comme possible” (meaning “as near as possible”).  Cy pres awards are utilized, albeit less often these days, in connection with class action settlements to provide for the distribution of unclaimed settlement funds or where the amount of the individual class benefit is too small to justify a direct distribution to each member of the class.  By way of example, in cases where the settlement benefit to the class is comprised primarily of injunctive relief (i.e., changes to a product’s labeling), the settlement fund may not be large enough (despite it being a million dollars) to justify distributing 25 cents to four million class members across the country.  Or, when a portion of the settlement fund is unclaimed, it may make sense to distribute the unclaimed portion to a charity or other organization, chosen by...

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General Counsel Q&A: Risk Transfer with Class Action Settlement Insurance

Seth Hopson, the former General Counsel of North American Power and Gas, discusses his experience with class action litigation and the benefits of class action settlement risk transfer.   Can you tell us about your role within the company? I was the General Counsel of a retail energy company serving 300,000+ retail and small commercial customers in the New England, Midwest and Southern regions of the United States. As such, I was responsible for all litigation and risk management on the legal and regulatory side of the business.   How frequently was your organization impacted by litigation? During the seven years from the inception of the business until the sale of the business, we went to trial once and were also involved in a multi-state class action litigation covering a potential customer class of over 700,000 current and former retail residential customers. That matter included allegations that the company breached our terms of service...

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An Interview with Defense Counsel: Paul Karlsgodt of Baker Hostetler

[vc_row triangle_shape="no"][vc_column][vc_column_text] In this interview, Paul Karlsgodt, Chair of Baker Hostetler’s Class Action Practice Group, discusses the benefits of working with Risk Settlements and the value of settlement risk transfer solutions.   Tell us about your practice and your department. I lead a nationwide practice of approximately 30 litigators who specialize in consumer class action defense.   How frequently do you handle class action cases? 95% of my practice is dedicated to defending class actions. I lead between one and two dozen active class actions pending at any given time.   What types? These days, most of my work is in the area of data security and privacy, but I also handle class actions involving consumer insurance coverage, pricing, and miscellaneous alleged violations of consumer protection laws.   Have you had any recent noteworthy victories? My most noteworthy recent victories have been in the area of data security class actions. In particular, we have been successful in getting an...

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Class Settlements And The Risks Of Viral Media Attention

Unfortunately, class action settlements tend to be another step down the road of financial uncertainty and unpredictability. In the class action context, when resolving a case using a claims-made settlement, the financial payout varies significantly, which can adversely impact liquidity, enterprise value, cash flow and assets. Additionally, when settlements go viral, companies face extreme losses which could exceed reserves and available cash on hand. So what causes cases to go viral and create unmitigated financial risk for settling companies? The answer is simple and also multifaceted: the internet. Digital communications and the thirst for relevant news content have completely changed how consumers gain awareness of class actions and how they file claims for settlement benefits. As a result of these changes, the ability to reach potential class members as well as those intent on abusing the system to receive free cash has created a fundamentally different risk paradigm for those looking...

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To Insure or Not to Insure with Class Action Settlement Insurance? That is the Question.

For most companies, Class Action Settlement Insurance is the answer. Few organizations walk away from a class action lawsuit unscathed. After spending significant sums to defend, the vast majority of cases result in some type of monetary settlement. Additionally, key executives can be diverted from business for months on end. Adding insult to injury, today’s media climate dramatically increases the likelihood that a class action will go viral. Cases against popular brands are frequently picked up by national news sources. Moreover, scores of websites and social media pages are dedicated to finding putative class members and instructing them on how to make a claim. In one widely publicized action, for example, a settlement involving the energy-drink brand Red Bull resulted in nearly 3 million class members seeking a $10 payout. In short, the risks associated with class action suits are greater than ever. But there is a way to mitigate this...

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Class Action Promotion Sites and Free Media: The Business of Making Claims Go Viral

Class action lawsuits are a much bigger risk today than they were 30 years ago. The internet has completely changed how consumers gain awareness of class action lawsuits and how they file claims for settlement benefits. As a result of these changes, class sizes have grown exponentially. In years past, known class members received direct notice, via mail, of their right to file a claim. Additionally, claim notices and filing instructions might be posted in one or two relevant print publications. For many consumers, filing a claim was more trouble than it was worth. Today, scores of websites and social media groups exist for two key purposes: (1) notifying the public of available class action settlement payouts; and (2) providing a quick and easy portal for filing claims. The impact of these sites is undeniable. For example, in one recent case against a supplement manufacturer, of the 44,000 consumers who filed a...

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