Class Action Research Reveals Legal Industry's Views on Objectors, Cy Pres, Quick-Pay and Rule 23
August 10, 2021
PHOENIX - Western Alliance Bank's Settlement Services group today released new research gauging the attitudes of attorneys, judges, mediators and claims administrators on vital aspects of class action litigation, including cy pres settlements, objectors and quick-pay provisions. The research, conducted by a third party firm — comprised of 11 in-depth interviews and an online survey of 155 attorneys, judges, mediators and claims administrators— also revisited perspectives on the Rule 23 amendments. It follows Western Alliance Bank's 2020 report on views around the Rule 23 amendments.
"Our research shows that cy pres settlement, objectors, quick-pay provisions and the Rule 23 amendments are some of the most impactful aspects of class action litigation," said Francesca Castagnola, senior managing director of Western Alliance Bank's Settlement Services group. "Even where there is consensus, respondents revealed the complexities that industry stakeholders grapple with concerning these elements. We hope the industry finds our research helpful in assessing the evolution of class action litigation—and preparing for future cases."
Report Key Findings Include the Following:
Objectors play a valuable role—but disagreements abound over what defines a valid objection
Despite heated debate on the topic of objectors, all segments of respondents agreed objectors played valid, even valuable roles in class action litigation, with only 11% saying that objectors should never be heard. But the debate of what defines a valid objection continues, with subjective viewpoints on the differences between good-faith objections (those argued with specificity and in the class' best interest) and bad-faith objections (frivolous, vague and aimed at extracting payments for the lawyers who filed them).
Will cy pres settlements continue?
A majority of respondents also agreed that cy pres settlements are particularly onerous, with 80% of lawyers feeling that they should be considered on a case-by-case basis. While 41% of respondents thought cy pres-only settlements would continue, a higher proportion (45%) predicted they would decrease, and the sentiment was nearly even across the various professions.
Quick-pay provisions viewed as increasingly favorable, despite concerns over optics
While 65% of all respondents (and 60% of attorneys) said they have personally been involved in cases that used quick-pay provisions, only 5% of plaintiffs' attorneys said their firms used one. And though respondents harbored doubts about the optics and ultimate value of lawyers receiving payment before class members, the vast majority (86%) of plaintiffs' respondents said they would either be very likely or likely to use them in the future.
Rule 23 amendments are increasingly popular, though changes still needed
The results found that the Rule 23 amendments were even more popular than they were a year ago when a large majority viewed the amendments in a positive light. Among the amendments, there was a notable increase in the positive perceptions on the change to more robust preliminary approval and the shift to notifying potential class members by electronic means. But even as most respondents were pleased with the amendments, they agreed that the system would benefit from further changes—particularly on the issue of bad-faith objectors—and continued evolution over time
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