Class action administrators streamline complex processes

When a class action is resolved — by a court or settlement — the time and resource demands of complex administration are often unforeseen by the litigating parties. Class action litigators familiar with claims administration appreciate the benefits of “doing it right.” The advantages can hardly be overlooked: the more efficient the management of the claims, the lower the administration cost, and the greater the funds available for disbursement to the class members.

Eric Khan joined Deloitte’s Financial Advisory practice from a boutique firm specializing in litigation consulting, where he managed the Canadian Claims Services group. As national director of Deloitte’s Class Action Administration practice, he says, "The cornerstone of any administration is developing appropriate protocols and procedures in advance. They provide the transparency, and in turn the credibility, to the process. Without controls, the legitimacy of the entire claims administration process may come into question.”

Focused administration promotes efficiency and credibility
According to Eric, an increasing number of defendants and corporate clients are recognizing that the claims process is outside their area of expertise. Rather than redirect valuable internal resources, many are engaging qualified class action administrators. The more complex the case, adds Eric, the greater the need. “For multi-jurisdictional class action administrations, third-party assistance is essential to providing an effective and expedient solution.”

He cites three key benefits to employing an independent class action claims administrator:

• Greater efficiency
• Increased comfort for class members
• Added credibility if the initiative comes under review by a court or other litigating parties

“For many defendants,” explains Eric, “third party assistance ensures continuity of focus on core business while providing a cost effective alternative. In addition, the independence of a class action administrator enhances public perception, and often reduces scrutiny by the courts.”

The best time to involve administrators? The earlier the better
In an ideal world, Eric and his team of Class Action Administration specialists would be involved before the terms of an agreement are defined, and before the documentation requirements have been established. “What often happens,” says Eric, “is that defence or plaintiff lawyers call us when the settlement structure has been agreed in principle, or a court order is in place. But the earlier we can get involved, the better. While the legal issues are being resolved, we can add value by reviewing the requirements, and putting the wheels in motion to streamline the process.”

The Deloitte team is also skilled at designing voluntary compensation plans and Alternative Dispute Resolution (ADR) programs for corporate clients. “If an organization has identified an area of exposure and wants to address the situation before litigation arises, we’ll work with them to develop a proactive program,” explains Eric. Additionally, the team is regularly engaged to provide oversight for defendants who are self-administering claim submissions.

Selective integration of technology saves times and money
Eric’s approach to addressing the complexity — and reducing the cost — of the administration process begins with a meticulous dissection of the agreement.  It’s during this phase that bottlenecks are discovered and capacity constraints are determined. The next step is to consider the value of adopting technologies that expedite the administration of claims. For example, Eric’s team has used Interactive Voice Response (IVR) systems to enable class members to file and digitally record oral claim submissions. This novel approach gives claimants a time saving and user-friendly alternative to the usual paper-based approach, while reducing labour requirements and thus the overall administration costs.

Electronic noticing, online claim filing, and digital imaging are other innovations that streamline the management of class action litigation. “There’s no hard-and-fast methodology,” says Eric. “The key is having the experience to identify the optimal mix of process and technology for each situation.”

Administration expertise acknowledged by the courts
Prior to assuming his role with Deloitte, Eric had oversight responsibility for a $27 million complex medical class action and a financial services settlement with 195,000 claimants. He has worked closely with counsels for both the defence and plaintiffs, and has reported directly to the courts.

According to Eric, “When it comes to complex claims administration, a resource-rich firm like Deloitte offers a lot of value. We have extensive experience in complex litigation matters, tremendous breadth and depth in finance and accounting, 47 offices across Canada, global access, and a sizeable investment in technology. We’ve successfully managed claims representing billions of dollars — and the courts acknowledge our ability to process claims quickly, objectively and professionally.”