Service awards and why they vary
In many class actions, courts approve a modest service award, sometimes called an incentive award, for named plaintiffs to recognize the time they spent and the risks they took on behalf of the class. These awards are never assured; the judge decides on them when approving a settlement, often looking at the plaintiff's actual involvement. Federal appeals courts have split on whether such awards are permitted at all, and at least one circuit has barred them, so where the case is filed matters. Promising a named plaintiff a specific payment in advance is generally improper, because it can create a conflict with the class.
Securities cases follow stricter rules
Securities fraud class actions under federal law follow a different structure. The court appoints a lead plaintiff, often the investor or group with the largest financial loss that can adequately represent the class, after a notice process at the start of the case. That lead plaintiff's share of any recovery is generally calculated the same way as every other class member's, though the court may award reimbursement of reasonable costs and expenses, including lost wages, tied to representing the class. Institutional investors frequently serve in this role, but individuals do as well. The motion to be appointed lead plaintiff has a short deadline that runs from the first published notice.
What the role asks of you
Serving as a named or lead plaintiff carries real responsibilities: staying informed, reviewing filings, producing documents, sitting for a deposition, and sometimes testifying. Your personal financial information and communications about the claim may become part of the case. You owe a duty to act in the interest of the class, which means you cannot accept a separate side deal. We explain these duties before you agree and discuss whether your situation, including any arbitration agreement or individual claims you have, fits the role. If you simply want to remain a class member, that is usually possible without taking on these obligations.
