Pro Rata Distribution
Splitting a fixed settlement fund proportionally among valid claims, so per-claimant amount drops as claim count rises.
Most class settlements have a fixed fund. The administrator collects valid claims, totals them, and divides the available money pro rata: each approved claimant gets the same share, with documented-loss claims often getting an additional reimbursement tier on top.
The practical consequence: the more people file, the smaller each individual payment. A $90 million fund with 2 million claims pays out around $30 per person after costs. A $5 million fund with 100,000 claims pays out about $40. This is why estimated payouts in pre-distribution notices are always ranges.
Pro rata is more common than fixed-per-person payouts because it caps the defendant's exposure. A few settlements promise a fixed amount per claim, with the residual going to a cy pres recipient or back to the defendant, but those are the exception.
If you see a notice quoting a very specific amount, treat it as a rough estimate. Final amounts come at the distribution phase, usually months after the claim deadline.
Related terms
Class Member
Anyone who falls within the definition of the class certified by the court.
Claim Deadline
The last day to submit a claim form and be eligible for a payment from a class action settlement.
Settlement Administrator
The third party hired to manage notice, process claims, and distribute payments in a class action settlement.