What is Common-fund Settlement?

Class action glossary term

Short Definition

A settlement with a fixed pot of money (the “fund”) that covers payments plus approved costs like fees and administration.

What It Means

In a common-fund settlement, the total amount the defendant pays is set up front. From that fund, the court-approved deductions (attorneys’ fees, expenses, administration costs, service awards, etc.) are paid, and the remainder is distributed under the plan.

Example

Example: “The defendant will pay $10 million into a settlement fund,” then payments depend on valid claims and distribution rules.

Why It Matters

Your final payout can change based on how many valid claims are filed and what deductions the court approves.

Related Terms

Pro rata distribution

Settlement fund (gross settlement)

Net settlement fund / net settlement amount

Attorneys’ fees

Primary Source

U.S. Supreme Court (Boeing Co. v. Van Gemert) / Common fund doctrine

Transparency

This class action term is explained for general informational purposes only and does not constitute legal advice. Definitions and applications may vary by jurisdiction and case context.

To see how this term is applied in real cases, explore current and past class action settlements.