The Lead Plaintiff is responsible for:

• hiring the class action lawyer,
• filing the class action lawsuit,
• consulting on the case, and
• agreeing to any settlement.

The Lead Plaintiff has the advantage of being able to consult closely with his or her attorneys regarding settlement offers, and is the only party who may object to a settlement agreement. Lead Plaintiffs may also receive more of the settlement or recovery at the end, at the discretion of the court, depending on the extent of their injuries and level of participation in the case.

Lead Plaintiffs and Hiring an Attorney

Though the Lead Plaintiff enters into an agreement with the attorney in a class action, the Lead Plaintiff is not responsible for attorney fees and does not take a monetary risk. Attorneys in class action lawsuits usually take the cases on a contingency fee basis, which means the attorneys pay all costs during the case and recover those expenses and their fees only if they win the case. The Lead Plaintiff is usually covered for expenses such as travel, copying, and postage by the attorneys.

Lead Plaintiffs as Consultants

The Lead Plaintiff participates in the lawsuit directly, which may mean participating in discovery—the process of gathering information that may involve answering written questions, producing documents and other evidence, and having sworn testimony taken in front of a court reporter. The Lead Plaintiff also attends hearings, trials, and other court proceedings.

Lead Plaintiffs and Settlements

Perhaps the most important role of the Lead Plaintiff is to consult with the class action lawyers about any possible settlements. The vast majority of class action lawsuits settle after they have been certified, so settlement discussions are very likely. It is the duty of the Lead Plaintiff to represent the interests of the class and not just his or her own interests. Only the Lead Plaintiff has the ability to object to a settlement agreement. All the other class members can only opt out of the suit if they don’t like the settlement, so the role of the Lead Plaintiff in approving settlements is very important.

Amount Awarded to Lead Plaintiffs

At the end of the case the court has to approve a settlement or decide how any recovery will be divided. The court awards an amount for expenses and fees to the attorneys and an amount to the Lead Plaintiffs. Whatever is left of the recovery amount is divided among all the class members as the court directs.

The amount awarded to the Lead Plaintiff depends on factors including:

• the injury suffered,
• the extent to which the Lead Plaintiff has been involved in the litigation,
• the size of the recovery for the entire class that the Lead Plaintiff represents.

The court has broad discretion in deciding on the amount to be paid to the Lead Plaintiff.

For more information about class action lawsuits, check out the following articles:

• Class Action Lawsuits: What They Are and How They Work
• Class Action Lawsuits: How to Find a Class to Join
• Class Action Lawsuits: Class Actions vs. Private Lawsuits
• Class Action Lawsuits: What to Do if You Receive a Class Action Notice
• Class Action Lawsuits: How to Find a Class Action Attorney