Are you wondering how much does it cost to start a class action lawsuit? The common assumption is that taking on a major corporation requires deep pockets and huge legal budgets.
In reality, starting a class action in the U.S. often costs plaintiffs nothing upfront. Thanks to contingency fee arrangements, lawyers get paid only if the case succeeds, taking a share of the settlement or judgment.
But “no upfront cost” doesn’t mean “free.” The expenses are simply structured differently.
In this article, we’ll break down the real costs of starting a class action lawsuit under U.S. federal law, from filing fees and attorney payment structures to recent settlement examples.
Key takeaways:
- Starting a class action in the U.S. rarely costs plaintiffs anything upfront: Most class action lawyers work on contingency, meaning they cover all initial expenses and only get paid if the case succeeds. If there is no win, you owe nothing.
- Lawyers cover major litigation expenses behind the scenes: From court filing fees to expert witnesses and large-scale class notifications, attorneys shoulder substantial costs for years. These are repaid from the settlement or judgment, not from your funds.
- Lead plaintiffs can receive extra benefits for their time: While they don’t pay legal costs, lead plaintiffs may invest significant time in the case. Courts sometimes approve small “service awards” to recognize their role in representing the class.
- Settlemate makes claiming your share effortless: If you qualify for a settlement, Settlemate helps you find it, file your claim, and track your payout, with zero upfront cost.
How much does it cost to start a class action lawsuit?
Starting a class action lawsuit typically requires little to no money up front from the plaintiffs. This is one of the most important features of class actions in the United States.
Most class action attorneys work on a contingency fee basis, meaning they only get paid if the lawsuit is successful. The lead plaintiff and class members generally pay nothing out-of-pocket to initiate the case.
In practical terms, this means:
1. No upfront legal fees
Most class action lawsuits run on a contingency fee system. This system means you don’t pay a retainer or hourly rates. Instead, your lawyer invests their time, staff, and resources into the case. If the case wins or settles, they receive a court-approved percentage of the recovery. If it fails, you owe nothing.
Takeaway: Ask early about their percentage cut.
2. Attorneys cover start-up costs
Filing a lawsuit requires fees, such as a federal court filing fee (about $400), process server charges, and administrative costs. In class actions, the law firm almost always pays these upfront, so plaintiffs don’t need to pull out their wallets.
Takeaway: Confirm in writing that costs are advanced.
3. Lead plaintiffs don’t fund the case
The lead plaintiff’s main job is to represent the entire class, not to finance the litigation. This can involve sharing documents, attending meetings, or sitting for a deposition. In return, they may get a small incentive award at the end, subject to court approval.
Takeaway: Track your involvement for award consideration.
4. Risk falls on the lawyer
If the case loses, the financial hit stays with the attorneys. They’ve assumed the risk, so they have every reason to fight hard for a win.
Takeaway: Choose a firm with proven results.
5. “Free” doesn’t mean no costs
Starting a class action may be $0 upfront, but litigation costs like expert witnesses, depositions, and trial prep add up. Attorneys usually deduct these from any settlement before paying the plaintiffs.
Takeaway: Ask for an estimated total case budget.
The hidden costs of starting a class action lawsuit
While plaintiffs do not pay upfront, class actions can be costly for the lawyers and firms who prosecute them. These cases often span years and require significant investments of time, effort, and money.
Some of the key cost components behind the scenes include:
- Attorney time and labor - Lawyers may spend thousands of hours investigating, filing, reviewing evidence, and arguing in court. In the Blue Cross Blue Shield Antitrust Litigation, counsel logged 500,000+ hours over a decade, earning $600M in fees after a multibillion-dollar win. If they’d lost, they’d earn nothing.
- Litigation expenses - Firms front costs like filing fees, expert witnesses, travel, depositions, and e-discovery. Experts in complex cases can cost six to seven figures. In data breach suits, forensic experts and large-scale notifications add significantly to expenses.
- Notice and administration costs - Once certified or settled, notifying millions of class members can cost millions. Mailing 10M postcards, for example, may run into several million dollars (Pacer Fees Class Action). These are paid by the defendant or from the settlement fund.
- Opportunity cost and risk - Firms risk years of unpaid work on each case. Under the American Rule and contingency model, a loss means no payment and unrecovered expenses, making case selection highly strategic.
Attorney fees in class actions: Who pays and how much?
Class action attorneys’ fees are usually paid out of the settlement or judgment, and they must be approved as “reasonable” by the court under Rule 23 of the Federal Rules of Civil Procedure.
In a sense, the defendant (or the common settlement fund) ultimately pays the plaintiffs’ lawyers, not the individual class members.
Here’s how it works:
Common fund doctrine
In most monetary class actions, all recovered funds go into a common fund, from which attorneys take a court-approved percentage plus costs. For example, a $10M settlement with a 25% fee means $2.5M for attorneys and $7.5M (minus admin costs) for the class. Federal courts often use 25% as a benchmark, adjusting for risk and complexity. Rule 23(h) allows “reasonable attorney’s fees and nontaxable costs”.
Court approval and oversight
Unlike private cases, class action fees require judicial review to protect absent class members. Judges weigh results, risk, hours worked (lodestar), and comparables.
The U.S. Court of Appeals for the Eighth Circuit in 2024 famously tossed out a $78 million fee award (which was about 22.5% of a $350 million data breach settlement) as an unreasonable “windfall” given the relatively modest effort and time the lawyers had invested.
Fee-shifting statutes
In some class actions, especially those enforcing civil rights or certain consumer protections, some statutes allow the plaintiffs to recover attorneys’ fees from the defendant if they win (fee shifting).
Examples include civil rights cases (42 U.S.C. §1988) or antitrust cases under the Clayton Act, etc.
Incentive awards and costs
Along with attorneys’ fees, settlements often propose other cost allocations such as reimbursement of litigation costs (e.g., millions spent on experts or document management) and “service awards” to compensate lead plaintiffs for their time and effort. These must also be reasonable and obtain court approval.
For example, in the recent PACER Fees class action settlement (2024), the judge approved a total of $25 million (20% of the $125 million settlement) to cover all attorneys’ fees, case costs, and service awards for the class representatives.
Recent examples of class action costs and payouts
To get a concrete sense of how class action lawsuit costs play out, especially regarding attorneys’ fees and settlement distributions, let’s look at a few real-world examples from 2024–2025:
- Blue Cross Blue Shield Antitrust case (2024): A landmark $2.7 billion settlement benefiting insured customers ended a 12-year battle. In 2024, the U.S. Supreme Court upheld a $667 million fee award to class counsel, about 24.7% of the fund, despite objections from some class members. In a related $2.8 billion settlement with healthcare providers, lawyers could receive up to $700 million (25%).
- NCAA Student-Athlete “NIL” settlement (2024): This $2.7 billion settlement resolved multiple cases over NCAA restrictions on name, image, and likeness compensation for athletes. Class counsel (Winston & Strawn, Hagens Berman) requested $515 million (~19%) and could seek another ~$200 million over the next decade from ongoing payments to athletes.
- California Pizza Kitchen Data Breach (2025): The Ninth Circuit affirmed approval of the settlement but reviewed the $800,000 attorneys’ fee (36% of the fund). While smaller in size than the mega-settlements, it illustrates how courts assess fee percentages even in modest cases.
- Papa John’s “No-Poach” Antitrust settlement (2025): A $5 million settlement addresses allegations that franchise agreements restricted worker mobility. Attorneys seek $1.25 million (25% of the fund) in fees.
- Clearview AI Privacy settlement (2025): In a novel structure, the settlement provides up to $51.75 million in future equity or 17% of revenue through 2027 instead of cash. Judges approved it despite objections from several states, with attorneys’ compensation tied to the settlement’s long-term value.
How much does it cost to start a class action lawsuit? Full expense breakdown
This table shows the typical costs of starting and running a class action lawsuit, who covers them upfront, and when they repay them:
Main points to remember when starting a class action lawsuit
Starting a class action lawsuit in the U.S. is less about having money and more about having a solid case and the right legal team.
Here are the actionable takeaways from everything we’ve covered:
1. Don’t let cost deter you from seeking justice
If the same defendant has wronged you and others, you do not need to pool money to file a class action. Most class action lawyers will evaluate your case for free and work on contingency.
Upfront costs are typically zero - you won’t pay unless and until there’s a recovery.
2. Understand how the lawyers get paid
In a class action, the lawyers’ payment will come as a cut of any settlement or judgment (often around 25-30%, subject to court approval). This percentage might sound high, but remember that they may work for years with no pay to earn it, and the court will make sure it’s reasonable.
No successful class action is free, but the fees come out of the winnings, not your pocket directly.
If there’s no win, you owe nothing. If there is a win, the fees will be transparent in the settlement notice.
3. Lead plaintiffs can even come out ahead (in a small way)
By stepping up to start the class action, a lead plaintiff can sometimes receive a court-approved service award (maybe a few thousand dollars) as thanks for their time.
More importantly, they have the satisfaction of leading a collective effort that can compensate many people and change a defendant’s behavior. But being a lead plaintiff also means a time commitment.
Weigh this when deciding to initiate a class suit - it won’t cost you money, but it will likely cost you time and require patience as the case winds through the legal process (often several years from start to resolution).
4. Choose experienced class counsel
Because the financial model is contingency-based, it’s in your interest to find lawyers who have a track record in class actions and the resources to fund the case adequately.
Well-capitalized, reputable class action firms cover the costs and avoid pressure to settle too low or too early.
They will also know how to navigate Rule 23’s requirements and maximize the class’s recovery. You typically don’t pay these lawyers upfront, but you are effectively hiring them to represent the whole class, so do your homework on their qualifications.
5. Know that international differences exist
If your issue crosses borders or if you’re comparing notes with friends in other countries, be aware that the U.S. is uniquely friendly to class action plaintiffs cost-wise.
Elsewhere, joining a class case might involve opting in and possibly contributing to a litigation fund or at least not having the “no win, no pay” guarantee. Always get advice specific to the jurisdiction if you’re involved in a non-U.S. collective lawsuit.
U.S. vs. International Class Action Costs:
How Settlemate simplifies costs and improves your payouts
Still wondering how much does it cost to start a class action lawsuit? In most consumer cases, you can join for free, and Settlemate makes it even easier.
Settlemate isn’t a law firm. It’s a technology platform designed to help you find eligible settlements, auto-fill claims, and track payouts, so you get your share without wading through legal jargon or paying a “claim helper” a cut.
With your permission, the platform can scan your inbox for settlement notices or receipts, then draft or submit claims on your behalf, no attorney is needed for standard consumer settlement filings.
What this means for your costs and payout:
- No upfront cost to join a settlement: Filing through Settlemate is free. The court process described earlier handles any legal fees in the case.
- Automation that stops you from missing money: Many claims-made settlements see low participation. Settlemate’s detection tools and reminders ensure you’re in the group that collects, boosting your ROI more than any fee debate.
- Transparent pricing for extras: Premium features, such as price-drop refund automation and recall alerts, are clearly listed with plan details and a money-back guarantee if you don’t recover more than you pay in the first year (terms apply).
- Clear boundaries: Settlemate provides tools, not legal advice, and explains precisely how automated submissions work, with final decisions made by the settlement administrators.
Ready to claim your money? Get started with Settlemate now.
