Class action lawsuits can be incredibly expensive, both for the plaintiffs and for the defendants. When a large group of people comes together to sue a company or organization, the costs can add up quickly. That`s why many class action lawsuits are settled out of court, with the defendant agreeing to pay a certain amount of money to the plaintiffs in exchange for dropping the case.
However, even settling a class action lawsuit can be expensive. Attorneys for both sides will need to negotiate a settlement agreement, which can take time and money. Additionally, plaintiffs` attorneys often work on a contingency basis, meaning they only get paid if they win the case or settle it for a certain amount of money. This means that they will typically take a percentage of the settlement amount as their fee.
To make things more manageable, many class action lawsuits use something called a “class action costs agreement.” This is an agreement between the plaintiffs and their attorneys that sets out how the costs of the lawsuit will be paid. Typically, the agreement will specify that the plaintiffs` attorneys will advance the costs of the lawsuit, such as court fees and expert witness fees, and will be reimbursed out of any settlement or judgment that is reached.
The class action costs agreement will also specify how the attorneys` fees will be calculated. As mentioned above, plaintiffs` attorneys often work on a contingency basis and will take a percentage of the settlement amount as their fee. However, there are rules governing how much attorneys can charge in class action lawsuits. In some jurisdictions, there is a cap on the percentage of the settlement amount that attorneys can take as their fee. In other jurisdictions, the court must approve the attorneys` fees before they can be paid out of the settlement.
Overall, a class action costs agreement is an important document in any class action lawsuit. By setting out how the costs of the lawsuit will be paid and how the attorneys` fees will be calculated, it helps to ensure that everyone involved knows what to expect and can plan accordingly. For plaintiffs, it provides a way to pursue justice without having to pay upfront costs, and for attorneys, it provides some assurance that they will be compensated for their work.