A Subscription Service Accused of Making Cancellation Difficult: How Would the Court Review Attorney Fees and Incentive Awards?

A court would allow only reasonable attorney fees linked to real benefit for class members. It would judge any incentive award — an extra payment to the named plaintiff — by work done, risk taken, and benefit created.

In hard-to-cancel subscription cases, fees often come from a common fund, the settlement money for the class. This article explains the fee test, the benefit limit, and the incentive test. It also flags where incentive pay is barred.

How does the court control fee requests?
What links fees to member benefit?
How is an incentive award judged?
Where do incentive awards fail?

How does the court control fee requests?

Class counsel must file a fee motion and give class members notice. Members get a chance to object before the judge decides. The National Consumer Law Center reproduces this Rule 23(h) reasonable-fee rule in its Rule 23 appendix text.

Judges often test the request as a percentage of the fund. They may cross-check with hours worked times reasonable rates. The judge must still approve the final figure as reasonable.

What links fees to member benefit?

Courts put actual benefit first, not billed hours alone. A fee far larger than member payouts can fail as disproportionate. Winston & Strawn reports a reversal where a $1.7 million fee about 30 times the payout failed in its Lowery fee-reversal analysis.

If few members claim funds, or coupons go unused, the benefit is small. Counsel cannot then defend a large fee. Judges cut or deny fees that do not match delivered value.

How is an incentive award judged?

Courts decide each incentive request on its own facts. They look at protection of the class, benefit gained, time spent, and risk of retaliation or harm to reputation. The federal court order archived by Justia in Philliben v.

Uber uses these Staton factors in its Philliben incentive ruling. Representatives who want an award should document each factor. General participation is not enough. The judge pays for concrete work and real risk tied to class benefit.

actions taken to protect the class
dates, hours, and tasks completed
dollars or relief gained for others
job, business, or reputation risk faced

Where do incentive awards fail?

Place matters. Most courts allow reasonable awards after checking adequacy. Foley & Lardner notes the federal appeals court for the Eleventh Circuit bars them as an unlawful bounty in its Johnson v.

NPAS analysis. A representative in the Eleventh Circuit should expect denial. A class member elsewhere should compare the request to work shown. Before opting in, check the fee motion deadline and file a written objection if pay looks out of line with relief.