In the News

Bonnie Mayfield and Dan Stephenson Discussed Cy Pres Distributions in Negotiation and Settlement of Mass Torts

October 1, 2013

Bonnie Mayfield, a Bloomfield Hills-based member of Dykema’s Litigation and Labor & Employment practices, authored an article — Conference Session Recap: Mass Torts Settlement — discussing cy pres distributions in mass tort settlements as well as the ethics of negotiating and settling mass tort cases.  The article appears in the recently published, Summer 2013 edition of the Alternative Dispute Resolution Newsletter of the American Bar Association, Section of Litigation.

The article recaps a panel discussion (including Daniel J. Stephenson, Los Angeles-based member and leader of Dykema’s 180-member Litigation Department) held during the ABA’s Litigation Section Annual Conference which explored the complexities of, and ethical implications arising during, negotiation and settlement of mass tort cases.  While the discussion between panelists and audience members touched on a wide variety of substantive issues — ranging from notice and consent to private settlement, future harms to residual funds — Mayfield’s article focused on two key issues involved in mass tort matters:  the use of the cy pres doctrine and ethical considerations surrounding mass tort negotiation and settlement.

As the article states, cy pres distributions should be a matter of concern for all parties involved in the settlement process, including defendants as they may no longer have a settlement if the cy pres distribution is not accepted by the court.  Defendants also may want to “seek a refund of undistributed settlement fund, if they have not waived their right to do so, and can argue that a return of the remainder to the defendants is an approach better than applying cy pres.”  Stephenson, who is quoted in the article, agrees that defense counsel should be concerned about cy pres distributions of excess settlement funds.  “Companies are much more willing to have settlement funds go to legitimately injured plaintiffs than to an entity that isn’t even involved in the litigation,” Stephenson said. 

To read this article in its entirety, click here.