How is class action settlement money divided?

Settlement agreements spell out exactly what the fund pays for. The Tom's of Maine toothpaste settlement is a clear example: its $2,900,000 fund was to be used to pay notice and administrative costs, the CAFA notice to government officials, the fee award, service awards, and class members' claims.

Class member payments come from what remains after the earlier slices. The Panda Restaurant Group data breach settlement states that its cash payments will rise or fall pro rata depending on what is left after documented-loss reimbursements, service awards, attorneys' fees and expenses, and notice and administrative expenses are paid.

Class members do not pay lawyers out of pocket. Instead, class counsel asks the court for a fee, usually from the fund. Under Federal Rule of Civil Procedure 23(h), the court may award only reasonable attorney's fees, class members must be told about the fee motion, and any class member may object to it.

Courts use two main methods:

• Percentage of the fund. The fee is a share of the total recovery. In In re Bluetooth Headset Products Liability Litigation (2011), the Ninth Circuit noted that courts typically treat 25% of the fund as the benchmark for a reasonable fee, departing from it only with an explanation of special circumstances.
• Lodestar. The lawyers' reasonable hours multiplied by reasonable hourly rates, sometimes adjusted up or down. Courts often use it as a cross-check on a percentage fee.

Coupon settlements have their own rule. Under the Class Action Fairness Act, the part of a fee tied to coupons must be based on the value of coupons class members actually redeem (28 U.S.C. 1712). Our guide on who pays the lawyers in a class action covers fees in more depth.

The people who put their names on the lawsuit often receive a modest incentive award, also called a service award, for the time they spent providing documents, answering questions, and sometimes sitting for depositions. The award comes out of the fund, must be approved by the judge, and is disclosed in the notice or the fee motion so class members can object.

These awards are usually small relative to the fund, but courts watch them closely. Rule 23(e)(2)(D) requires the judge to find that a settlement treats class members equitably relative to each other before approving it, and an award that looks like a reward for supporting a weak deal can draw objections.

Once the fees and costs are set, the net fund is divided using the plan of allocation the court approved. Common approaches:

• Equal pro rata shares. Every valid claim gets the same amount, which shrinks as more people file.
• Per-unit or per-device payments, often capped. The Apple Siri settlement paid a pro rata share of up to $20 per device for up to five devices.
• Tiers by proof. Documented losses get reimbursed first, and flat cash payments share what is left.
• Weighted formulas. Payments scale with how long or how much you were affected.

The Facebook user privacy settlement used a weighted formula based on how long each claimant had an active account during the class period from 2007 to 2022. According to a court filing reported by Money, the average Facebook payment was $29.42, the maximum was $38.36 for people active all 188 months, and the minimum was $4.89. More than 19 million claims were validated, which is why a $725 million fund produced payments in the tens of dollars.

Not every check gets cashed. In the FTC's 2019 study of 149 consumer settlements, the average check cashing rate in cases that required claims was 77%. The settlement agreement says where leftovers go. Options include:

• A second distribution to claimants who cashed their first payment. The Facebook settlement began a second round from uncashed funds on June 9, 2026, according to CBS News.
• Cy pres donations to a nonprofit the court approves. In the Tom's of Maine settlement, any money left after approved claims is designated for Equal Justice Works.
• Other terms in the agreement, which the court reviews at approval.

Leftover-money terms are part of what the judge reviews at the fairness hearing, and class members can object to them like any other term. See what happens to unclaimed settlement money for more on these options.

You can see exactly how a specific settlement divides its money. On the official settlement website, look for the long-form notice (which usually states the maximum fee counsel will request), the settlement agreement (which contains the plan of allocation), and the fee motion (filed before the objection deadline). If you think the fee is too high or the split is unfair, you can object by the deadline in the notice.

If the payout formula means your share is tiny compared with what you actually lost, you may be better served outside the class. A free case review takes about two minutes and connects you with independent attorneys who handle these cases. For current payouts, browse our open settlements and file on the official settlement website linked from each one.