Do You Give Up Your Right to Sue by Filing a Claim?

Yes, for the claims the settlement covers, but filing isn't the step that does it. In most class actions for money, you give up your right to sue over the released claims by staying in the class, which happens automatically unless you opt out by the exclusion deadline. Filing a claim just collects your share. If you do nothing at all, you're usually still bound by the release and simply get no payment.

What a release of claims is

Every class action settlement includes a release. It's the part of the settlement agreement where class members give up legal claims against the company in exchange for the settlement benefits. Without a release, the company would have no reason to settle, since it could be sued again over the same thing.

The release defines what you can no longer sue over. Usually it covers claims based on the same facts as the lawsuit, during the class period. It doesn't mean you can never sue the company again for anything. A data breach settlement, for example, typically doesn't stop you from suing the same company over an unrelated product defect.

Releases also usually look backward. They cover conduct up to a certain date, often the date of preliminary approval or the end of the class period. If the company does something new after that, the old release generally doesn't stop you from bringing a claim about it, though the exact cutoff depends on the wording of each agreement.

Why staying in the class is what binds you

Under Federal Rule of Civil Procedure 23, most class actions seeking money damages are certified under a part of the rule that gives class members the right to request exclusion. Members who don't exclude themselves are bound by the judgment. That's why the release applies to you whether or not you file a claim form.

• ✓Stay in and file: you're bound by the release and receive your share of the settlement.
• ✓Stay in and do nothing: you're still bound by the release, but you get nothing unless payments are automatic.
• ✓Opt out: you aren't bound and receive nothing from the settlement, but you keep the right to sue on your own.

When opting out might make sense

For most people with small losses, staying in the class is the practical choice. Suing a large company individually is expensive and slow, and the typical consumer harm is too small to justify it. Opting out is worth considering when:

1. 1Your losses are much larger than what the settlement pays, and you can document them.
2. 2You have a strong individual claim, such as a serious injury the release would cover.
3. 3You're already pursuing your own case or arbitration over the same issue.
4. 4You object to the settlement on principle and are willing to give up its benefits.

If any of these apply, talk to a lawyer before the exclusion deadline, because after it passes the choice is usually locked in. Our guide to opting out of a class action covers the mechanics.

Read the release before you decide

The release section of the settlement agreement is the authority on what you give up. The class notice summarizes it, and the full agreement is usually posted on the official settlement website. Look for:

• ✓Which claims are released, often described as claims arising from the facts alleged in the complaint.
• ✓Which claims are excluded. Some releases carve out personal injury claims, for example.
• ✓The time period covered.
• ✓Who is released, which may include the company's affiliates and partners.

If the release language is confusing, call the settlement administrator or class counsel listed in the notice. Class counsel represents the class and can explain the terms, though they can't advise you on your separate individual case. For the legal definition, see what a release of claims is.

Opt-out deadlines often come before the claim deadline, and both are easy to miss. SettleScout tracks the settlements that match the brands you use and reminds you before the key dates.