- Courts treat fees as central to settlement fairness. Under FRCP 23(e) and 23(h), judges scrutinize fee provisions alongside class relief, and objectors can challenge both settlement terms and the fee request.
- Fee calculations turn on method and “benefit” valuation. Courts commonly use either a percentage of recovery (often benchmarked around 25% in some jurisdictions) or a lodestar approach, and disputes frequently arise over whether items like administrative costs or cy pres should be counted in the recovery base.
- Coupon settlements face special CAFA constraints and circuit splits. If relief is deemed a “coupon,” CAFA can require fees tied to coupon relief to track actual redemption value, with circuits differing on what qualifies as a coupon and how strictly courts must apply percentage-versus-lodestar calculations.
Article
Attorneys’ Fees in Class Action Settlements
Practical Law Journal
Written by Paul Seeley
November 2026Estimated Read Time: 1 min
Key Takeaways
In an article for Practical Law Journal, Paul Seeley explains how federal courts evaluate and approve fee requests in class settlements, emphasizing the court’s duty under Federal Rule of Civil Procedure 23 to ensure the overall deal, including fees, is “fair, reasonable, and adequate.”
The article outlines the district court approval process, including notice requirements and the role of objections as a safeguard against conflicts of interest. It also surveys the two main approaches courts use to calculate fees—the percentage-of-recovery method and the lodestar method—and highlights recurring disputes about what counts as “class benefit,” such as administrative costs and cy pres distributions. The piece further describes what a fee motion must contain, how fee awards are reviewed on appeal under an abuse-of-discretion standard, and how the Class Action Fairness Act of 2005 (CAFA) restricts fee awards in coupon settlements by tying certain fees to the value of coupons actually redeemed. The article concludes with best-practice guidance aimed at structuring fee provisions to withstand objections and appellate scrutiny.
Read more here. (Subscription required)