Since I am a physicist, not a lawyer, I can only state what has happened as it has appeared to me, not the finer points of the law. Thanks for the info.
Looking at the process *as a layman*, there is little apparent difference between an "out of court" settlement and a court-approved agreement between parties: in either case, rather than court-stipulated damages the two (or more) parties come to a settlement. That stated, the distinction may be important; I do not have the training to tell ( however, if you want a discussion on the difference between momentum and inertia, I'm your guy :) )
When looking at the suits as publicised by the firms, again as a layman, the class action is generally announced and the law firm filing calls for members of the class to contact them.There is usually no indication of the original party to the suit. The appearance is that the firm is soliciting customers. Appearance may not be reality, but appearance is usually accepted as reality.
Perhaps you can clarify one more point: is the suit typically filed on behalf of an individual and expanded to a class, or is it filed on behalf of the class in the first place?
Damages in any suit rarely, if ever match the award granted. I do not expect anything else: the Dow/Corning company, for example, does not have total assets worth a major fraction of the breast-implant damages in that suit. However, I do for some reason expect people to realize the money they lost is gone, never to return.
The distribution of money was as was told to me by an ex-corporate lawyer who has defended against class actions. It was apparently (again, the appearance thing) backed up by the cash distribution in a couple of suits I followed affecting companies in my geographical area.
I don't fault the insurance companies for limiting their liability and urging a settlement. I would likely do the same, and legal responsibility is important. I must admit, however, that it has the feel of a profit-making enterprise placing itself above the position and authority of the court.
And, at the last, if the idea is to curb fiscal misconduct toward shareholders , I would think going after the individuals who did so with criminal or civil charges and not involving corporate resources would make more sense. In the final analysis, use of corporate money is ultimately use of stockholder money, so the corpora are using stockholder money to defend themselves against the stockholders, who will then take a portion of their money (if they win a settlement) and give it to themselves.
Which then brings another question to mind: since, in this case, the people charged with misconduct are major shareholders of record during the class period, are they also eligible for a share of the award, if any, that is portioned out?
There has to be at least one plaintiff, or you can't file to begin with. But it's usually a strawman type of plaintiff. I am sure JR will try to convince you otherwise -- he is a regular contributor to all of the boards in which his firm has a financial stake. P.S. Have you noticed that some of these firms send out multiple announcements -- let's hope it's because they aren't getting as much interest as they'd like. Unfortunately, these things usually travel as opt-out classes . . . so you can respond, get the info, and opt out. You may not collect anything, but at least JR won't collect on your behalf.