Laarni T. Bulan is a Principal and Laura Simmons is Senior Advisor at Cornerstone Research. This post is based on their Cornerstone report.
Highlights
Historically high median settlement amounts persisted in 2019, driven primarily by an increase in the overall percentage of mid-sized cases in the $5 million to $25 million range as well as a decrease in the number of smaller settlements.
- There were 74 settlements totaling $2 billion in 2019.
- The median settlement in 2019 of $11.5 million was unchanged from 2018 (adjusted for inflation) and was 34 percent higher than the prior nine-year median.
- The average settlement amount in 2019 was $27.4 million, which was 43 percent lower than the prior nine-year average.
- There were four mega settlements (settlements equal to or greater than $100 million) in 2019.
- The number of small settlements (amounts less than $5 million) declined by 36 percent to 16 cases in 2019, the fewest such settlements in the past decade.
- The proportion of settlements in 2019 with a public pension plan as lead plaintiff reached its lowest level in the prior 10 years.
- In 2019, 53 percent of settled cases involved an accompanying derivative action, the second-highest rate over the past decade.
- Companies that settled cases after a ruling on a motion to dismiss (MTD) were, on average, 50 percent larger (measured by total assets) than companies that settled while the MTD was pending.