How Transparent Are Class Action Outcomes?

Empirical Research on the Availability of Class Action Claims Data

by Nicholas M. Pace, William B. Rubenstein

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Class actions are among the most public forms of civil litigation, especially because a judge must review and approve a proposed class settlement following public notice and a public hearing. Ironically, however, a veil of secrecy can fall over class action litigation the moment the judge signs off on the agreement and ultimately, little information is available about how many class members actually received compensation and to what degree. This lack of transparency is especially troubling because of evidence that aggregate payments in class settlements sometimes constitute a mere fraction of the compensation fund extolled by the parties at the time of settlement review. This paper examines the extent to which claiming data are available and recommends ways to increase transparency in this area. The authors reviewed the official court files in a sample of 31 class action settlements and they also made direct inquiries to the judges, lawyers, and settlement administrators in another set of 57 cases. Searching through the case files and communicating with the participants, they were able to gain access to data in fewer than one of five closed cases. Despite the significant time and effort they put into the task, the final outcomes of four of five class action cases were beyond their discovery. It is not that the data are non-existent — claims administrators or parties certainly have them — it is, rather, that they are secreted away. The outcomes of publicly approved settlements lie locked in private files. They argue that this is a problem for three reasons: because the case outcomes might not be all that they purport to be; because the lessons that they could teach — for example, about which approaches work best — are lost to secrecy; and because the public record is unnecessarily incomplete and public access unnecessarily thwarted. They end the paper by proposing a set of solutions, including requiring parties to report back to the court on the final claiming data, publicizing this data, and creating a central repository for it.

The research in this report was conducted by the RAND Institute for Civil Justice.

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