A motion for preliminary approval is the next step after parties sign the settlement agreement. It asks the court to grant a hearing to review and approve the settlement so the notice and distribution process can proceed.
During a preliminary approval hearing, the court asks for specific information about the settlement, such as:
- Estimated class benefits
- Estimated attorney fees
- An allocation plan proposal
- The anticipated number of class members expected to submit a claim
- Whether any funds will be reverted back to the defendant.
The court will approve the allocation plan if the settlement is deemed fair and adequate for the defined class. In addition to the settlement administration, other related topics that may be covered include:
- Notice: A plan to implement a compliant notice program that will achieve the broadest possible outreach and satisfy due process.
- Case Anomalies: Procedures to manage opt-outs, possible objections, incentive awards, and cy pres awards.
- Expectations: Historical analysis of comparable class settlements are a good indicator of what’s to come and helps to manage the expectations throughout the notice and distribution period.