How are attorneys paid in class action cases?
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UPDATED: Feb 28, 2009
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The class action attorneys are usually paid only if the case is successful, and then in am amount determined by the court to be fair and equitable. The judge responsible for the class action reviews a submission made by the attorneys, called a “fee petition” This petition sets forth in detail the work the attorneys have done on behalf of the class. The court, after giving members of the class an opportunity to make their views known, then enters an order establishing the amount of the judgment or settlement proceeds to be paid to the attorneys.
The amount of the fees courts award is based upon a number of factors, including the quality of the work, the difficulty of the case, the nature of the result, the number of hours the lawyers and their staff spent on the case and the risks involved. In some cases the major benefits are an order compelling a defendant to stop doing things that damaged the class of plaintiffs, such as discontinuing anti-competitive prices, or remedying a violation, such as having a polluter clean up a river. Where the major benefits to the class are in the form of a cash settlement from the defendant(s), very often the court will award approximately 30% of the gross settlement.