A recent Law 360 story by Lauraann Wood, “Class Benefits Becoming Larger Factor for Fees, Experts Say”, reports that class action fee awards are experiencing a shift in which counsel's compensation is becoming more about the benefits secured for class members than simply the amount of money involved in a settlement, according to a panel of experts who discussed the topic Thursday.

While the extent to which class benefit considerations factor into a class action fee award depends largely on the judge handling the case, there's no denying that settlement negotiations are focused more on securing as much benefits as possible while moving away from discussing fees before much of anything else, according to the participants of a virtual program hosted by the National Association of Legal Fee Analysis.

"I really believe that where we're headed now is looking at what benefits are actually being received by the class members, and that's the hallmark, the touchstone, of what kind of fee you can expect to receive," said panelist Sol Weiss of Anapol Weiss.  The panel was moderated by University of Georgia School of Law professor Elizabeth Burch, and featured Weiss, Jay Edelson of Edelson PC, and Rachel Soffin of Milberg Coleman Bryson Phillips Grossman PLLC.

The shift in class action fee consideration feels like "a huge moment of reform" that is forcing attorneys to take on "a more modern view" in this area of litigation, Edelson said.  It feels that way particularly since in past decades, such as the 1980s and 1990s, the general view was that class actions merely aimed to "bop the defendant on the nose" and deter them from certain conduct, and then "where the money goes isn't as important," he said.  "I think there's been a gradual shift ... to understanding that we have duties to clients and the duty means we've got to get them compensation," he said.

Soffin agreed that class benefits should be a major focus in settlement negotiations, adding that she has noticed the focus shift on the defense side of negotiations as well.  "I think everyone that I have worked with [has] become more savvy about the relief that we have negotiated actually translating to the class, and people actually being able to make claims," she said.

But Soffin pushed back against the idea that there should be a one-size-fits-all approach to awarding fees for class action settlements, saying it's important to "look at everything as a whole," including the amount of litigation and research involved.  For example, the idea of basing fee calculations on the class benefits actually received instead those made available could lead to counsel receiving a smaller award over factors they can't control, she said.

If helping class members is the goal but the people advocating for them hear that they can only receive compensation for a fifth of the hours they put into a case simply because a pandemic was happening and people couldn't file a claim on their computers in time, for example, then "you're going to have a lot of lawyers, good lawyers, who will no longer be advocating on behalf of classes," Soffin said.

Thursday's discussion flowed partly from the Ninth Circuit's decision earlier this month in Lowery v. Rhapsody International, in which the court unwound a $1.7 million fee award for plaintiffs' attorneys in a royalties class action against Napster that garnered just $53,000 for songwriters.  Weiss said he's concerned about how that ruling will be used in future fee disputes.  The court's decision "is the poster child for what the defense bar is going to use to try to denigrate the good work that plaintiffs' lawyers do in many class cases," he said.