Where parallel class actions are pending, a defendant may negotiate with counsel most willing to accept a low settlement, obtaining a release binding all members. Courts scrutinize such settlements closely.
Competing counsel frequently object.
Alternative Names:
Reverse Auction|Competing Class Settlement
Why it Matters?
Courts scrutinize settlements reached with counsel in a weaker or later-filed case, examining whether the negotiating counsel had developed the claims sufficiently to value them, which means a settlement that appears advantageous may face rejection and the delay of renewed litigation. Consolidating or coordinating parallel actions before negotiating produces a more durable resolution even where it costs more.
Frequently Confused with
Related terms
Frequently asked questions
What do courts examine?
What produces a durable resolution?
