Is reversion of undistributed damages an incentive to settle or a windfall for settling Defendants???
In an article first published in the ThoughtLeaders4 Competition Magazine on 8 December 2023, Woodsford’s Hugh Tait and Jordan Howells, explore the concept of how reversion of undistributed damages might be applied in the Competition Appeal Tribunal (CAT).
Should undistributed damages arising from settlements in opt-out class actions revert to the Defendants, be given to another organisation such as a charity (as is the case post-judgment) or be used to “overcompensate” class members who lodge a claim? Will the CAT dangle this “carrot” in front of Defendants? If it does, will early settling Defendants benefit from a “first in, last out” approach?
The CAT is yet to adjudicate on this issue but will need to sooner or later so that parties to settlement negotiations, on both sides of the table, have clarity on what happens to undistributed sums.
In the meantime, have a read of our views on reversion in the article that can be viewed here.