June 02, 2015 Articles

Rule 23 Proposals Could Clarify Cy Pres Awards

Plagued by ambiguity, the doctrine has become fertile ground for objectors

by Gillian L. Wade

In April, the Rule 23 Subcommittee to the Advisory Committee on Civil Rules issued a report outlining and explaining potential revisions to Rule 23, which governs class actions. One of the potential revisions is a proposal to add criteria for courts to use in evaluating settlements containing a provision for cy pres distribution. See Rule 23 Subcommittee Report, in Agenda Book for Advisory Committee on Civil Rules, Washington, D.C., April 9–10, 2015, at 243–297. Adopting that proposal (or a like one) would provide needed clarity in this area of law, which has been plagued for years by ambiguity and has become fertile ground for objectors. Today many settlements that would otherwise direct funds to worthy causes benefiting the public have opted to avoid cy pres provisions altogether. Cy pres distributions offer a change to the age-old saying that "nobody likes lawyers until they need one." These provisions can encourage settlement, remove ill-gotten gains, deter future conduct, and, most important, offer help to those who need it most.

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