If a class action lawsuit is successful in obtaining relief for the members of the class, in addition to getting whatever the class members get, the class representative (i.e., the named plaintiff or the class rep) can petition the court for what is called an “incentive award,” to compensate the named class plaintiff for the additional time, effort and risk associated with bearing the fiduciary duties of a class representative.
Judges and courts are typically given broad discretion in deciding whether to allow incentive awards (i.e., they can refuse to give an award) and, if they do award them, in setting the amounts of the incentive awards, which can range from hundreds of dollars to over $50,000.
In deciding how much, if anything, to award to the class representatives, courts will often look at factors such as the amount of involvement that the class representative had in the class action case, the actions the class plaintiff has taken to protect the interests of the class, the degree to which the class benefitted from those actions (including the size of the recovery for the class, if any), the amount of time and effort the plaintiff expended in pursuing the class litigation and
the risk to the class representative in commencing suit, both financial and otherwise.
Class actions can be a powerful tool for consumers’ rights in society. Class action incentive awards are one way that courts can encourage or induce individuals to participate in class action lawsuits.