Class action settlement values down in 2017: Cornerstone
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A large percentage of settlements under $5 million, combined with the absence of any settlement more than $250 million, led to a dramatic drop in the value of class action settlements in 2017 to $1.5 billion from $6.1 billion in 2016, says a report issued Wednesday by Cornerstone Research Inc.
“More than half of 2017 settlements were for $5 million or less. We also saw a significant decline in midrange to large settlements,” said Laura E. Simmons, a senior adviser for Boston-based Cornerstone, who co-authored the litigation consulting firm’s annual report.
“A combination of lower estimates of the proxy for plaintiff-style damages and smaller issuer defendant firms contributed to this decrease,” she said.
Among other report highlights:
• There were 81 securities class action settlement in 2017, a slight increase from 2016’s 85, but the second highest level since 2010.
• There were four megasettlements of at least $100 million in 2017, compared with 10 in 2016, accounting for 43% of total settlement dollars compared with 81% in 2016.
• The median settlement amount in 2017 was $5 million, more than 40% lower than 2016’s $8.7 million, while 2017’s average $18.2 million settlement was 75% lower than 2016’s $72 million.
• No settlements exceeded $250 million for the first time in more than five years.
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Securities class action settlements up in 2016
The number of securities class action settlements approved by U.S. courts in 2016 was 85, the highest level since 2010, according to a report issued Wednesday by San Francisco-based Cornerstone Research.
