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What is Pro Rata Distribution?

Class action glossary term

Short Definition

A payout method where payments are adjusted proportionally, often based on how many valid claims are approved or how claims are weighted.

What It Means

“Pro rata” means “in proportion.” In settlements, it usually means the available money is divided among approved claimants based on a formula. If more people file valid claims than expected, individual payments may go down. If fewer file, payments may go up—subject to caps or minimums in the agreement.

Example

Example: A $1,000,000 net fund split among 10,000 valid claims is about $100 each; 20,000 claims is about $50 each.

Why It Matters

It explains why “estimated payment amounts” often change after the claim deadline.

Related Terms

Claims-made settlement
Net settlement fund / net settlement amount
Claim deadline

Primary Source

Cornell Law School – Wex (pro rata)

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.

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