Class action lawsuits are legal proceedings that allow many individuals to collectively bring a claim to court, typically against a corporation or large entity, for similar grievances. These cases can end in significant settlements or judgments, where the defendant agrees to pay compensation. However, not all awarded funds reach the claimants; a portion remains unclaimed. The handling of this unclaimed money varies, but it generally follows a few established paths.
Cy Pres Awards
One common method of dealing with unclaimed class action funds is through cy pres awards. Cy pres, a French term meaning “as close as possible,” involves distributing the leftover settlement funds to third-party charities or nonprofit organizations that indirectly benefit the class members or support issues related to the lawsuit’s nature. For instance, if the case involved privacy violations by a tech company, the unclaimed funds might go to nonprofits focusing on privacy rights or digital literacy.