Objectors And Cy Pres Funds Aren't All Bad, Report Says

September 15, 2021


Objectors and cy pres funds were among the top concerns that prompted the 2018 amendments to the federal rules governing class action settlements. But does that means there’s no place for them?

Not exactly.

That’s according to this research report, released on Tuesday by Western Alliance Bank’s Settlement Services Group. The report, which involved 11 in-depth interviews and an online survey of 155 attorneys, judges, mediators and claims administrators, from January through April 2021, found that only 21% of respondents said cy pres funds, created to distribute settlement funds to designated organizations or entities, should never be used. In fact, 57% of all respondents said cy pres settlements should be considered on a case-by- case basis — as opposed to always, or never, being used.

Does that mean cy pres isn’t dead? The report found that 41% of respondents expected cy pres settlements to increase, while 45% thought they would decrease, largely due to digital payments, objectors or the U.S. Supreme Court.

Cy pres, however, isn’t what it used to be. Paul Bland (Public Justice) was quoted in the report saying: “While there are often some residuals even after these multiple distributions, they’re much smaller than if courts didn’t use those approaches.” As for objectors, the report found that 86% of respondents agreed they should be heard either all the time or on a case-by-case basis. Only 11% said they shouldn’t.

The report also took a brief look at the growing use of “quick pay” provisions, in which plaintiffs’ lawyers get paid immediately after the final approval process. Of plaintiffs’ respondents, 86% said they were “very likely” or “likely” to use quick pay, mostly because it reduces time pressures and ensures attorneys are paid.

Overall, the 2018 amendments appear to be only growing in favor. In last year’s report, Western Alliance Bank found that 81% of respondents had favorable views about the changes. This year, that grew to 84%.

The report concluded: “While the vast majority of respondents are pleased with the positive direction of the reforms, there is also agreement that the system would benefit from further changes.

To access Western Alliance Bank's 2021 Class Action Research Report, click here.

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