This article will focus on the due process aspect of allocation methodologies in mass tort class actions and multidistrict litigations. This typically involves the substantive right to allocation and procedurally how the process is structured.

Let’s assume you have settled a mass tort and it is now time to allocate the settlement proceeds among the claimants. There is a variety of settlement models. For example, the settlement can involve all or almost all of the claims, e.g., Vioxx, ASR Hips or individual inventory settlements involving particular counsel or groups of counsel.

In an inventory settlement, the defendant settles based on an evaluation of each case by a law firm or group of law firms. The defendant may require that a certain percentage of the claimants accepts the allocation. The defendants negotiate a settlement grid or matrix with an agreed-upon settlement value. The values may be based on age or type of injury and may use a point or scoring system. Each point can be worth an agreed-upon value. The higher the points, the higher the allocated amount. On occasion, the defendant may negotiate a lump-sum amount, leaving the allocation process to the plaintiffs. Most settlements include a blow-out provision requiring an agreed-upon percentage of claimants to accept the settlement terms.

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