What is common fund?
A common fund is the total pool of money a defendant agrees to pay to resolve a class action, from which claim payments, attorneys' fees, administration costs, and any cy pres distribution are all drawn before individual class members are paid. Under the common fund doctrine, attorneys' fees are typically paid out of this same pool rather than billed separately to class members.
The size of a common fund is usually announced publicly when a settlement is reached, but the amount each class member actually receives depends on how many people file valid claims, since most common-fund settlements divide the remaining money among claimants rather than guaranteeing a fixed per-person amount. This is why publicized 'settlement worth $50 million' headlines can translate into modest individual payments once fees, costs, and the claims rate are factored in. Some settlements instead use a claims-made structure with no common fund, paying only submitted and approved claims up to a specified amount.
Sources
Last reviewed 2026-08-22.