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How is the money divided in a class action lawsuit?

Do the plaintiffs get a fixed percentage, or is there some kind of "cost" basis. For example, if the attorneys can "deduct costs" then it is obvious they can suck away all the money by just inflating their billable hours as they please. Is there any mechanism to prevent this from happening?

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  • What kind of class, suing what kind of group, for what reasons, in what jurisdiction? Too broad, VTC.
    – user4657
    Commented Jan 5, 2017 at 9:30
  • This is decided on a case by case basis with only very general rules that apply. Most often it is decided via a settlement that a judge will approve if it seems fair given that it was negotiated by advocates for opposition positions, rather than imposed by a judge. The vast majority of class actions that pay out are settled. All aspects of class action resolutions are subject to judicial review and sometimes rejected, but the lack of an sufficiently effective advocate to watch the class attorney is a pervasive issue in class actions.
    – ohwilleke
    Commented Jan 5, 2017 at 19:28

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Any certified class action settlement has to be approved by a court. In principle, the primary objective of the court is to see that members of the injured class receive "appropriate" compensation. Fees awarded to the Lead Plaintiff and Counsel are (at least in principle) a separate question.

Under both American and English Rule, a court must review and approve any awarded pursuant to a judgment. It is not uncommon for a court to adjust them. And submitting "inflated" hours to the court would be an act of .

Methods and customs by which "reasonable" attorney fees are determined are the subject of innumerable papers and studies. Class action lawsuits are a particularly tricky case of the question, with their own customs and standards for fee awards.

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