What Is an Incentive Award?

An incentive award, also called a service award, is a payment to a class representative on top of their regular share of the settlement. It compensates them for the time, effort and risk of bringing the case on behalf of everyone else, and it must be approved by the court.

Why it matters when you file a claim

Incentive awards usually come out of the same settlement fund that pays class members, so they slightly reduce what is left to share. In most cases the amounts are small relative to the overall fund. The notice will typically say how much the representatives plan to request, so you can see it before deciding whether to object.

What courts consider

• ✓How much time the representative spent, such as gathering documents or being deposed.
• ✓Any risks they took on, such as publicity or strain on a relationship with an employer.
• ✓Whether the award is reasonable compared with what class members receive.
• ✓Whether the award might have given the representative a reason to favor a weaker deal.

Courts differ on how they view these awards, and the law on them varies by federal circuit and state.

A simple example

In a settlement where class members each receive a modest cash payment, the two named plaintiffs ask the court for an additional service award each. The judge reviews their declarations describing the work they did and approves the request, or reduces it if it seems out of proportion.

Where to find the amount

The proposed amount is typically disclosed in the notice and in a motion filed with the court before the fairness hearing. Many settlement websites post that motion along with the fee request. If you want to object to it, you will usually need to do so in writing by the objection deadline. In most cases, the award is decided at the same time as final approval, and the amount the court approves is what is paid.

How it relates to other terms

Incentive awards go to the lead plaintiff or class representatives, are paid from the settlement fund in most cases, and are reviewed alongside attorneys' fees before final approval.

Want to see what you might receive as a regular class member? SettleScout shows a payout estimate for each settlement you match, plus reminders before the deadline.