Key points
- No settlement is binding on group members without formal court approval.
- The court must be satisfied the settlement is fair, reasonable, and in the interests of the group.
- Legal fees and litigation funder commissions are deducted from the settlement sum before distribution.
- Group members must submit a claim form to participate in the distribution.
- Distribution timelines vary — typically six to eighteen months after court approval.
Court approval process
Once the parties agree on settlement terms, they apply to the court for approval. The court holds a hearing at which group members can object. The judge considers whether the settlement amount is reasonable relative to the likely outcome at trial, whether the deductions for legal costs are appropriate, and whether the distribution scheme is fair. If satisfied, the court issues approval orders.
How compensation is calculated
The total settlement sum is divided among eligible group members according to a formula set out in the settlement scheme. The formula typically reflects the nature and quantum of each member’s loss — for example, the number of shares held, the amount paid for a defective product, or the severity of a personal injury. Individual amounts are calculated by the scheme administrator, not the court.
What group members need to do
After court approval, the scheme administrator issues a notice to all group members explaining how to submit a claim. You will typically need to provide proof of your loss — purchase receipts, financial statements, medical records — within a specified deadline. Failing to submit a claim by the deadline may mean you receive nothing, even if you are technically entitled to compensation.
This article is general information only and does not constitute legal advice. ClassActions.com.au is an independent information service and is not a law firm. If you believe you may have a legal claim, consult a qualified Australian legal practitioner.