STRUCTURES, COSTS, AND DISTRIBUTIONS
In spite of the high level of precision found in the carefully chosen words used by attorneys drafting settlement agreements, and the centuries of AngloAmerican jurisprudence that interpret and enforce such contracts, no standard taxonomy exists for those who attempt to understand how the terms and conditions contained in a settlement's complicated provisions affect the costs paid and compensation received by parties to litigation.
Class actions are certainly no exception to this observation. While the subtle nuances of what exactly is being promised when class counsel and the defendants' attorneys reach an agreement to end the litigation might be known to the parties (and hopefully to the judicial officer approving the settlement), it is often difficult for outsiders to understand who is supposed to pay what to whom and when, and from what source, and for what in return. Indeed, some attorneys make settlement provisions deliberately vague to provide greater latitude in interpreting claiming requirements, to avoid attracting the attention of those who might object to its terms, or to defer, until the distant future, confronting potentially thorny issues that could scuttle a hard-won resolution during the sensitive period prior to court approval.
Even when the terms are crafted in such a way as to make them as unambiguous as possible, the attorneys involved employ very different language from that used in provisions in other cases with similar intentions. For example, an "incentive payment" to representative plaintiffs in one case is a "direct award" in another; "settlement funds" sometimes include class counsel fees and costs and sometimes do not; "benefits available to the class" can include payments made to charities in some situations and in others refer only to the cash claimants might pocket; an order that the "defendant shall pay for the costs of administration" in one case means that the payments will be made by the defendant out of the common fund and, in another, that the defendant will handle