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Matthew Potter, Senior Strategic Advisor at JND Legal Administration

Class action claim filing rate is the rate at which noticed class members complete all steps required to submit a claim to receive compensation from a settlement. This article outlines factors to consider as you develop the terms of your settlement, and specifically the claims process class members will need to follow, to maximize class participation and optimize filing rate.

While these factors influence claim filing rates for all class action settlements, individual factors may affect each case differently depending on litigation type (e.g., antitrust, employment, consumer protection, etc.), case profile and class demographics. With that in mind, it is always advisable to consult on case strategy with an administrator experienced in the settlement claim filing process.

Factors are listed in four categories: 1) Perceived Benefit, 2) Notice Form Layout, Design and Media, 3) Claim Form Design and Filing Process and 4) Reminder Notices.

1. PERCEIVED BENEFIT

The single most influential factor affecting claims filing rate is compensation value, meaning the amount of compensation available to the individual class member. If the settlement fund is small relative to the class size and amounts to a nominal compensation for the class member, your claims filing rate is going to be low. Other factors listed below will prove less important in such a scenario.

Remember that from the moment a legal notice is received to the moment the class member decides whether to file a claim, she is asking herself, “Is this worth my time?” The effort required to review the notice, procure any additional information requested and submit a claim should be offset by the perceived benefit of filing. In some cases, the form of redress (e.g., check, direct deposit, prepaid card, PayPal, etc.) may impact the class member’s decision to file.

In settlements where an exact amount or range cannot be calculated for the individual class member until the claim filing deadline has passed and all claims are filed, or where the amount cannot be calculated until after the class member provides additional information specific to her claim, perceived benefit plays a significant role in claims filing rate. If the information provided for calculating redress is insufficient or difficult to comprehend, one of two things will likely occur:

  1. The class member’s benefit calculation will be lower than the actual, in which case, she may decide not to file a claim, or
  2. The class member’s benefit calculation will be higher than the actual, in which case, she may elect to file a claim only to later be disappointed and possibly complain when the final amount is distributed.

Neither of these outcomes is desirable. Always provide class members with as much information as possible about their benefit on the notice and claim form and make it expressly clear what form(s) of payment will be made available.

2. NOTICE FORM LAYOUT, DESIGN AND MEDIA

Class action settlement notices contain a lot of information, including the benefits of the settlement, a summary of the class member’s legal rights and the process class members need to follow to file a claim for a benefit under the settlement. What information is included, how that information is presented and how the notice is disseminated all impact the claims filing rate.

  • Direct v. indirect notice. Notice in settlements can be provided directly via mail or email, or indirectly via online, print, TV and/or radio advertising. Direct notice will almost always increase the claims filing rate in class action settlements, as the information is sent directly to each class member, inviting her to participate. Indirect notice or notice ads put the onus to file on the class member. Indirect notice is also frequently used to supplement direct notice when only a portion of the class is readily identifiable. Direct and indirect noticing efforts should complement one another.
  • Ease of filing. Additionally, the direct notice will almost always include a physical claim form or a link to the settlement website claim filing process so that class members can immediately file a claim without taking additional steps. When class members must search for the claim form or do not trust the form submission platform (e.g., a “not secure” settlement website), they are less likely to file. Where possible, reduce steps to file.
  • Language and accessibility. Class members may lose interest in or be intimidated by a lengthy and complex notice, and they are less likely to file a claim if they cannot understand the litigation or determine what they are eligible to receive if they file. Plain language notices that are clear and concise have higher claims filing rates. Know your class. Research into class member demographics is a crucial component in determining a best media strategy and developing a successful notice program.
  • Earned media. Sometimes settlements are picked up by news outlets and consumer publications, promoted by word of mouth, or trend on social media and networking platforms. This is what is referred to as earned or free media; it is essentially free advertising. While this phenomenon can be difficult to predict, it is not impossible to plan for. An experienced claims administrator will be able to assess whether your case has the characteristics that earn media, and those with proven noticing expertise and multichannel media ability can advise on media strategy to increase the likelihood of this phenomenon occurring.

3. CLAIM FORM DESIGN AND FILING PROCESS

The claim form is used to capture all claimant information required for inclusion in the class action and to facilitate benefits calculation. Many of the same considerations for notice forms are applicable to claim form design. An optimal claim form design is clear and concise.

  • Steps to file. For settlements that do not require any additional information from a class member for a benefit to be calculated and provided upon settlement approval, “sign and send/submit” is often the best approach. This can be a sign and send claim form that can be mailed, or an electronic claim form with eSignature that can be submitted online.
    Other times, there may be considerations that require the inclusion of additional steps. The goal is to adequately inform and establish trust with the class member while also keeping the filing process simple. Uncomplicated processes tend to generate higher claims rates than complex processes asking class members to provide information that is not readily accessible, answer a series of questions on the claim form or provide documentation that may be difficult to obtain.
  • Claimant data verification and requests for information. For settlements requiring additional claimant information from class members, less is more. Keeping the information that the class member is required to provide to a minimum will make it easier and less time consuming to complete the form, thereby increasing the filing rate.
    In many settlements, the defendant is in possession of some, or all of the additional claimant information required to calculate benefits. However, the terms of the settlement may require that the class member verify the accuracy of this data. Rather than asking the class member to provide this information, include the class member data available to you on the claim form or through secure access on the settlement website for the class member to review. This approach saves time for the class member and can also reinforce trust in the process.
  • Filing options. Class member demographics for a given class action can vary as can their preferences for filing. In a settlement where notice is being mailed to class members, including a hard copy claim form is standard and will inevitably generate claims submissions. However, providing the option for class members to visit the settlement website to file their claim online will produce even more submissions.
  • Mobile first. Today, most people use their cell phones more than they use a computer. Settlement websites that allow class members to file online need to be optimized for mobile. User experience is an important element of settlement website design and directly impacts claim rate. If a class member encounters a slow-loading webpage, a broken form or even text that is too small to read on her phone screen, she may become frustrated and decline to participate.

4. REMINDER NOTICES

We live in the Information Age. Mail can be misplaced. Emails can go unopened or worse, never land in the inbox. Ads can go unnoticed. While not required as a part of the notice in most settlements, issuing a reminder or multiple reminders to class members can be an effective strategy for increasing the number of claims filed. There are many ways to accomplish this. Mailing a postcard as a reminder or sending a follow-up email 30-60 days (about two months) before the claim filing deadline are prime examples of this. Digital advertising and retargeting can also be used to remind class members to file later in the claim filing period.

As in marketing and sales, multiple touchpoints are often needed to motivate the desired action. A well-timed and properly executed reminder grabs the attention of the class member, highlights the filing deadline and outlines the action(s) the class member needs to take to file a claim. Further, this additional touchpoint can instill trust by assuring the class member that she is the intended recipient of the notice and that she likely has a direct and personal interest in the settlement.

SUMMARY

From beginning to end, and at every touchpoint in between, the content and delivery of communications with class members must be timely, informative, unambiguous and practical. As there will never be a one-size-fits-all settlement strategy, it is important to consider each of the factors detailed above as it relates to your case. Further, these factors hold greater potential to drive claims filing rates when considered holistically and designed to work in tandem. Seek an administrator with a demonstrated breadth of experience in how these and other factors affect class action settlements to advise on best practices given the particulars of your case.

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