FREE access to Professional Liability Insurance.

Click here for more information.
You are currently not signed in. Any products you have purchased will not be available until you Sign In.
For a personalized walk-through of IRMI Online, Request a Demo.

opt-out lawsuits

A type of lawsuit in which an individual plaintiff "opts out" of the larger securities class action lawsuit that is also being brought against the same corporate defendant. Opt-out suits are most often filed by an institutional investor (e.g., a bank, insurer, or pension fund). By making a claim that is separate from the larger class action, an individual plaintiff can sometimes negotiate both a larger and more rapid settlement recovery than if the plaintiff was a more passive beneficiary of the class action lawsuit. In addition, by settling on an accelerated basis, an opt-out plaintiff gets "first dibs" at the defendant's directors and officers (D&O) liability insurance policy proceeds. This is important because the defense expenditures required by complex, protracted securities litigation rapidly depletes and frequently exhausts D&O policy limits, often before monies are available to make actual claim settlements. See also Securities class action claims.

Links for IRMI Online Subscribers Only: PLI X.C, III.D


Social Media