What Is Cy Pres?
Cy pres is how leftover settlement money can go to a related nonprofit when paying class members directly isn't practical.
Cy pres is a doctrine that lets a court direct leftover or undistributable settlement money to a charity or nonprofit whose work relates to the interests of the class. The name comes from a French phrase meaning "as near as possible."
Why it matters when you file a claim
Cy pres usually comes into play only after class members have been paid, or when sending more money to them isn't practical. Money ends up there when checks go uncashed, when claims run low, or when a further distribution would cost more than it would deliver. Filing a claim and cashing your payment keeps more money with class members.
When courts tend to approve cy pres
- ✓After distributions to class members, when a remainder is left.
- ✓When an additional payment to class members would be too small to be worth the cost.
- ✓When class members can't be identified or located.
- ✓When the recipient's work is closely connected to the issue in the case.
Cy pres is debated. Critics argue settlements should prioritize paying class members, and courts look carefully at relationships between recipients and the parties or lawyers. Standards vary by court.
A simple example
A privacy settlement pays everyone who filed a claim. A year later, some checks have gone uncashed, and a second distribution would cost more to process than it would pay. The court approves sending the remainder to a nonprofit focused on online privacy education.
Cy pres and claim rates
Low claim rates are one reason money can end up with a cy pres recipient instead of class members. Many people never learn about a settlement or never finish the claim form. When fewer people claim, there is a greater chance funds go unused, depending on how the agreement is written. Some settlements counter this by sending money automatically to identifiable class members, which reduces how much is left over.
How it relates to other terms
Cy pres is one destination for residual funds and is often triggered by uncashed settlement checks. It is the opposite of a reversionary settlement, where leftovers return to the defendant.
The best way to keep money with the class is to claim it. SettleScout tracks your matched settlements and reminds you before each claim deadline.
Frequently Asked Questions
How is a cy pres recipient chosen?
The parties typically propose one, and the court must approve it, often looking for a close connection to the class's interests.
Can I object to a cy pres award?
Yes. Class members can object to any part of a settlement, including its cy pres provisions, by the objection deadline.
Does cy pres reduce my payment?
Usually not directly, since it typically applies to money left after class members are paid. It depends on the settlement's terms.
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