Coupon settlements compensate members with credits toward future purchases from the defendant. CAFA restricts attorney's fees in such settlements, requiring that fees based on coupon relief be calculated on the value of coupons actually redeemed.
Courts scrutinize whether the relief has real value.
Alternative Names:
Coupon Relief, In-Kind Settlement
Why it Matters?
The fee restriction is what constrains these settlements, since counsel cannot be paid on the face value of coupons that members never redeem. Redemption rates in coupon settlements are frequently very low, which means the actual class benefit is a fraction of the nominal settlement value. Courts have rejected settlements where coupons required additional purchases from the defendant that caused the alleged harm.
Frequently Confused with
Related terms
Frequently asked questions
How does CAFA restrict coupon settlements?
Why do courts scrutinize them?
