[consumerpro]

One of the most debated - and least understood - parts of class action litigation is how the lawyers for the class get paid if the case is successful.

If the class action case settles, generally, as part of the settlement, the sides will agree that the plaintiff's class action attorney is entitled to reasonable fees, not to exceed an agreed upon amount. Members of the public often assume that this figure is what the class action attorney will necessarily get, but that is not always true. Instead, it is usually a maximum limit on how much the class action lawyers can be paid.

In fact, it is generally up to the court to set the compensation for the class action lawyers. The court does this, usually as part of the final fairness hearing, by hearing evidence as to how much work went into the case, how risky the litigation was, and what the results were. Usually, the court will evaluate the fairness of requested fees based on two approaches. First, the court uses a "percentage of recovery" approach, determining the percent of the requested fees as compared to the total value of the class recovery. Unlike personal injury cases, where attorneys traditionally get one-third of what they recover for their clients, courts generally limit class action attorneys' fees to an amount around one-quarter of the what they recover for the entire class. Next, as a "cross-check," courts will look at the total amount of attorney time and expenses to make sure that using a percentage approach would not result in a windfall.

If the class action case does not settle, but rather is won at trial, the court holds a similar hearing to evaluate the fairness of the requested fees.