Five Things You Didn’t Know about Class Action ADR

For both plaintiffs and defendants, class action litigation is time-intensive, costly and requires close oversight from start to finish. As a result, parties are increasingly turning to alternative dispute resolution (ADR) providers to manage many aspects of class action litigation. The value that ADR can offer to parties extends well beyond reaching a settlement.

Here are five things you might not know about the role ADR is playing in class action litigation.

1. Taming professional objectors

“The emergence of ‘professional objectors’ to class settlements has greatly complicated class action resolution,” says Judge James M. Rosenbaum (Ret.), a JAMS neutral based in Minneapolis, Minn.

Professional objectors, says Judge Rosenbaum, file objections to large settlements, citing concerns about fees and costs, or questioning the size of class distributions. This can cause lengthy delays, holding up the settlement process and any distributions, creating headaches for both sides.

Judge Rosenbaum says class action mediators can help parties tame the potential impact of professional objectors.

“A mediator can facilitate discussions to try and resolve which party will bear the cost of defending these practices and attempt to apportion any costs to settle objectors’ claims.”

2. Highlighting non-monetary relief

Engaging in class action mediation can help parties realize there might be ways to settle the dispute that go beyond money. These options might also speed up the resolution of the dispute.

“Identifying and developing non-monetary forms of relief that may accompany a restitutionary or damage model will often help in moving a class action toward settlement,” says Judge Carl J. West (Ret.), a JAMS neutral based in Los Angeles.

3. Getting it all out on the table

Perhaps one of the biggest barriers to settling a class action dispute is the withholding of information by one or more parties.

“Class action mediation often involves helping the parties in getting the necessary information on the table to permit evaluation of the claims,” says Judge West. “Examples would include the number of products sold in a consumer product false advertising claim or the number of hits on an Internet site in a consumer based class action.”

By ensuring both sides know everything about the dispute, a class action mediator can often speed up the path to settlement as parties are negotiating from the same place.

4. Managing multi-year payouts

“Multi-year payouts are not uncommon in class action cases,” says Judge Rosenbaum.  “This is particularly true in cases involving medical therapies.”

Judge Rosenbaum says ADR providers can play a key role in managing multi-year payouts.

“It may be advisable to use interim-period accounting services,” says Judge Rosenbaum. “This ensures settlement procedures are regularly followed and that all payments, both to parties and counsel, can be tied back to appropriate documentation and disbursement orders.”

5. Heading off problems before they happen

ADR professionals are not clairvoyant. Those with deep experience handling class action disputes, however, can often spot potential trouble in advance and provide a way for parties to work out a response ahead of time.

For example, notes Judge West, a class action mediator or arbitrator can play a valuable role in anticipating how a judge will respond to proposed settlement offers, or whether the parties might encounter objectors. Parties can then tailor settlements accordingly.

Engaging an experienced class action ADR provider can help parties on both sides not only resolve their dispute in a timely and cost-effective manner, but manage many other aspects of complex litigation.