Claims-made settlement
A claims-made settlement pays only people who file approved claims, so the company's cost depends on how many claims come in.
Also called: claims-made, claims made settlement
A claims-made settlement pays only people who file approved claims, so the company's cost depends on how many claims come in.
What it means
A claims-made settlement is a class action deal where the company pays only for the claims that class members file and the administrator approves. There is no fixed settlement fund handed over up front. If few people file, the company pays little. Some deals also cap the total the company can owe.
That is different from a common fund, where the company commits a set amount. In a claims-made deal, the amount in a headline may be the most the company could pay, not what it will pay. Money nobody claims is never paid.
People also use "claims-made" loosely for any settlement that requires a claim form. The two ideas are related but not the same, because a settlement can have a fixed fund and still require claims. Federal judges look closely at claims-made deals, especially the claims process, which should not be unduly demanding.
What it means for you
In a claims-made settlement, filing is the only way to get paid. A missed deadline means no payment, so treat the claim deadline as firm. Read the claim form with care, because these deals often come with proof requirements and per-person limits.
Filing a claim with the settlement administrator costs nothing. Owed reminds you before deadlines and tracks your claim after you submit it.
Example
Say a software company settles over a misleading upgrade promise. The agreement says it will pay each approved claimant $20, up to a total of $4 million. Only 30,000 customers file valid claims, so the company pays $600,000. The other $3.4 million is never paid. In a non-reversionary fund of the same size, that leftover would stay in the settlement instead of going back to the company.
FAQ
In a claims-made deal, the company pays only for approved claims, often up to a cap. A common fund sets aside a fixed amount up front, and the terms then decide what happens to unclaimed money. It may be redistributed, donated or, in a reversionary deal, returned to the company.
Not many. An FTC staff study of 149 consumer class action settlements found a median claims rate of 9% and a weighted average of 4% in cases with a claims process.
Related terms
- FTC staff report, Consumers and Class Actions: A Retrospective and Analysis of Settlement Campaigns (2019)
- Managing Class Action Litigation: A Pocket Guide for Judges, 3d ed. (Federal Judicial Center, 2010)
- Federal Rule of Civil Procedure 23, class actions (Cornell LII)
Updated Oct 18, 2026. Plain-English definitions for general information — not legal or tax advice.