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When sending a disbursement for a settlement in a class action, mass tort, or bankruptcy cases, parties often feel that control is now out of their hands and there is nothing more to do than wait for checks to be negotiated. However, this is not always the case. Where there is a desire for a high percentage negotiation rate in a disbursement, there are many steps that can be taken both before and after checks mail to ensure as much of the fund as possible is received by the intended recipients of the disbursement.
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1. Do additional research in class action and bankruptcy disbursements
First, prior to mailing, parties should consider doing additional address research to ensure that check addresses are as up to date as possible. There are several sources for address research that experienced administrators can use to update payee addresses, such as LexisNexis Allfind and Thomson Reuters CLEAR. Remember, investing in such address research up-front can save costs on processing undeliverable mail and reprinting check reissuances.
2. Consider practical issues for payees
Second, and also prior to mailing, the parties should consider what practical issues payees may encounter when negotiating checks and build in processes to address them. For example, if checks are being made out to multiple payees, printing the names with an “or” between the names rather than an “and” will allow either payee who receives the check to be able to negotiate it. Alternatively, if checks are sent with an “and” between payee names, parties may want to consider if a payee may request a split payment if they are unable to communicate with the other listed payee on their check. Similarly, parties may want to allow an administrator to setup processes whereby payees may request a check be reissued in an updated name (for example, a change from a maiden to married name), or reissued in the name of an estate or an heir if a payee is deceased (upon submission of appropriate documentation). Thinking through processes up-front will allow for uniform treatment of requests and ultimately allow more checks to be negotiated.
3. Reissue returned or undeliverable mail
Third, if a forwarding address is provided or research finds another address for undeliverable mail, another attempt should be made at getting the check into the hands of the payee by reissuing it. Additionally, after checks are stale they can all be proactively reissued, with or without refreshing address research.
4. Send reminders to class action, mass tort, and bankruptcy payees
Fourth, there are many instances where the payees receive their check, but set it aside rather than negotiate it. For this reason, it can be very effective to send a reminder to the payee that a check was mailed and to negotiate it before the stale date. Reminders can be in the form of an email, postcard, or one-page notice. Such reminders also prompt an intended payee to contact the administrator and request a reissue if the check was not received.
5. Ensure claims administrators conduct extensive outreach
Fifth, an administrator can conduct a more extensive outreach campaign using outbound calling to payees who have not negotiated their checks. This is typically more costly than a reminder mailing or emailing, but can be very effective for several reasons. It may be the case that the listed phone number for a payee is correct, but the check was mailed to an outdated address. A phone call then informs the payee there is a check for them and provides an opportunity for them to update their address and request a check reissue. Additionally, it puts trained agents knowledgeable about the case in contact with payees so if there are any outstanding questions about the payment, reissue options, tax consequences, or otherwise, they can be addressed on the one call.
Parties who partner with a claims administrator that implements these methods strategically will find that more of their disbursement fund falls into the hands of intended recipients, less complaints are received after a disbursement phase is complete, and less of a fund remains un-negotiated or requires escheatment or cy pres.
Rebecca Random is a project manager for the class action, mass tort, and claims administration business unit at Epiq. Random is responsible for overseeing all aspects of case administration, including coordination with parties, courts, and government agencies, designing case documents, including claim forms, check stubs, and website content, overseeing claims processing, disbursements, reporting, budgeting, personnel management, and quality assurance. She specializes in consent orders with government agencies and managed large disbursements.