What Are Attorneys' Fees in Class Actions?
Class action lawyers are paid from the settlement, but only in an amount the judge approves. Here is how that works.
Attorneys' fees in class actions are the payment class counsel receive for bringing and resolving the case, plus reimbursement of their expenses. A judge must approve the amount, and it is most often paid out of the settlement fund before money is distributed to class members.
Why it matters when you file a claim
Fees are one of the biggest deductions from a common settlement fund, alongside administration costs, so they affect how much is left for claimants. Class counsel must file a fee request, and class members get a chance to object to it. The notice usually states the maximum the lawyers plan to request.
How fees are calculated
- ✓Percentage of the fund: the court awards a share of the total settlement. This is common in cases with a single cash fund.
- ✓Lodestar: the court multiplies reasonable hours worked by reasonable hourly rates, sometimes adjusted up or down.
- ✓Cross-check: many courts use one method and check it against the other.
- ✓Separate payment: in some settlements, the defendant pays fees separately, so they don't reduce the class fund.
What counts as a reasonable percentage varies by court and case size; there is no single rule.
A simple example
A company agrees to pay a fixed sum to settle. Before the fairness hearing, class counsel ask for a percentage of that sum to cover their fees and costs. The judge reviews the hours, risk and result, then approves the request or reduces it. The remainder, after administration costs and any service awards, goes to class members.
Where to find the fee request
Class counsel usually file their fee motion before the objection deadline so class members can review it. Many settlement websites post it alongside the settlement agreement. The motion explains the amount requested, the hours worked and the reasons the lawyers think the fee is justified. Reading it is optional, but if you are considering an objection about fees, it is the document that matters, and the court's final decision may differ from the request.
How it relates to other terms
Fees are paid to class counsel under the common fund doctrine and come out of the settlement fund. For a deeper look, see how much class action lawyers get paid.
SettleScout's payout estimates account for the fact that fees and costs come out first, so you see a more realistic number for each settlement you match.
Frequently Asked Questions
Do I pay the class action lawyers?
Not out of pocket. Their fees are approved by the court and typically paid from the settlement fund or separately by the defendant.
Can class members object to attorneys' fees?
Yes. Rule 23(h) requires notice of the fee request and gives class members a chance to object.
Do lawyers get paid if they lose?
Generally no. Class counsel usually work on contingency and only receive fees if there is a recovery.
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