Case Process

What Are Common Benefit Fees and Costs in an MDL?

What Are Common Benefit Fees and Costs?

A multi-district litigation (MDL) is a consolidation of many civil lawsuits before a single judge. MDLs are common in pharmaceutical and medical device cases like the Valsartan litigation and C.R. Bard hernia mesh litigation; however, MDLs have also been formed for other kinds of cases, such as the Uber passenger sexual assault litigation. The purpose of an MDL is to serve judicial economy by having all pretrial proceedings such as discovery and some bellwether (test cases) handled by the MDL court.

Once an MDL has been created, the court will appoint a leadership committee (typically called the Plaintiffs’ Steering Committee) to manage the litigation on behalf of all plaintiffs. The court identifies specific tasks, such as taking depositions, writing legal briefs, and attending hearings, that—when done by appointed Plaintiffs’ leadership on behalf of all plaintiffs as opposed to individual clients—are considered “common benefit work.”

At the end of an MDL, members of Plaintiffs’ leadership are compensated for the time spent performing common benefit work and any expenses incurred performing that work in accordance with a principle known as the common fund doctrine. The common fund doctrine was established by the United States Supreme Court in Trustees v. Greenough, 105 U.S. 527 (1881) and has been adapted to the MDL context to allow the group of attorneys that litigate a case on behalf of a group of plaintiffs to recover a portion of their legal fees and costs from the settlement (or verdict) created on behalf of all plaintiffs.

I. Common Benefit Fees

Members of plaintiffs’ leadership are entitled to compensation in the form of common benefit fees from a settlement or verdict at the conclusion of a case. Common benefit fees are assessed as a percentage of the settlement or verdict in a case. Common benefit fees are paid out of the attorney fee.

Many clients are concerned that the common benefit fee is another attorney fee on top of the attorney fee that their attorney will already be receiving from any settlement; however, the common benefit fee is a fee paid by the client’s primary attorney. In other words, a portion of the primary attorney’s own fee is used to pay the common benefit fee.

II. Common Benefit Costs

Common benefit costs are expenses incurred by the work performed by plaintiffs’ leadership on behalf of the plaintiffs in the MDL which are deducted from any settlement or verdict as a percentage. Common benefit costs are costs not taken out of the primary attorney’s attorney fee.

The exact amount of common benefit costs that will be assessed in a particular MDL is established by Court order and is subject to the Court’s discretion. However, an assessment of 4–6 percent of the settlement is common. The common benefit costs assessed in a particular MDL typically are not known until later in the case.

III. How Does This Affect My Settlement?

Retainer agreements list the attorney fee and cost arrangement agreed upon between an attorney and client. When a case is filed in an MDL and there is a settlement, that case may also be subject to common benefit fees and costs.

The common benefit fee is taken from the attorney fee. This means that the attorney must pay a percentage of the fee they make on a given case into the common fund. The client will not be responsible for paying an additional attorney fee.
The common benefit costs will most often be a percentage of the client’s total recovery as assessed by the Court. While we typically do not know this number in advance, as common benefit orders are not issued until later on in multidistrict litigation, examples from other cases can give us an idea of what may happen:

Examples from Other MDLs:

Review my case for free –>

Looking for help?

Contact Us Now!

Active Cases