What Is a Class-Action Settlement?

Full Video Transcript

A class-action settlement is an agreement between the plaintiffs in a class-action suit and the defendant to settle the lawsuit outside of a courtroom. Oftentimes, the parties involved in a class-action lawsuit only want to recover for harm they suffered, and they will settle without going to trial. Settlements occur when the parties can agree on an outcome that is fair to all parties involved, and the court has approved the settlement. This helps everyone involved avoid the costs and pressure of a trial. The class members will be notified of the settlement, often by receiving a notice of settlement in the mail. Settlement notices may also be published or advertised. It’s important to read a notice of settlement carefully, as it will contain information on your rights and may require you to respond to the notice within a certain deadline.