No Claim, No Gain: The Unclaimed Property Solution to Undistributed Class Action Awards

The two primary goals of consumer class actions are to provide relief to those who have been harmed and to deter similar behavior in the future. Yet, in many class actions, claims rates are so low that only a small fraction of class members actually receives their share of a settlement, leaving remaining unclaimed funds subject to judicial discretion. This allows for reversion to the defendant, pro-rata distribution, or escheat by the state. While distribution to charities via the cy pres doctrine is often deemed the “next best” use of these funds, inadequate oversight of recipient charities results in distributions that may not effectively address the harms caused by the defendant’s conduct.