Total Settlement Dollars & Settlement Size in 2019 Class Action: An Excerpt from Securities Class Action Settlements—2019 Review and Analysis
The total value of settlements approved by courts in 2019 declined dramatically from 2018 due to the absence of very large settlements. Excluding 2018 settlements over $1 billion, however, total settlement dollars declined by a modest 3 percent in 2019 (adjusted for inflation).
The median settlement amount in 2019 of $11.5 million was unchanged from the prior year (adjusted for inflation).
Compared to the prior nine years, larger median settlement amounts in 2019 were accompanied by higher levels in the proxy for plaintiff-style damages. (See page 5 for a discussion of damages estimates.)
The median settlement amount in 2019 was 34 percent higher than the prior nine-year median.
Mediators continue to play a central role in the resolution of securities class action settlements. In 2019, nearly all cases in the sample involved a mediator.
As discussed above, the median settlement amount was unchanged from 2018. Generally, the median is more stable from year to year than the average, since the average can be affected by the presence of even a small number of large settlements.
The average settlement amount in 2019 was $27.4 million, 43 percent lower than the average over the prior nine years. (See Appendix 1 for an analysis of settlements by percentiles.)
If settlements exceeding $1 billion are excluded from the prior nine-year average, the decline in 2019 was 16 percent.
There were four mega settlements (equal to or greater than $100 million) in 2019, with settlements ranging from $110 million to $389.6 million. (See Appendix 4 for additional information on mega settlements.)
Despite a decline in the average settlement amount from 2018, the number of small settlements (less than $5 million) also declined by 36 percent to 16 cases in 2019, the fewest such settlements in the past decade. Cases that result in settlement funds less than $5 million may be viewed as “nuisance” suits, a shift upwards from a threshold of $2 million prevalent in early post–Reform Act years.
57 percent of cases settled for between $5 million and $25 million.
Total Settlement Dollars 2010–2019 (Dollars in billions)
Read Cornerstone Research report Securities Class Action Settlements—2019 Review and Analysis.