Class Action Perspectives
Online Claims Filing: Past, Present, and Future
Over the past decade, online claims filing has advanced from its beginnings as a technical innovation to its current position as another tool in a claims administrator’s toolbox. In fact, it has become an extremely valuable tool, and its evolution is not complete. Administrators continue to enhance online claims filing platforms to meet settlement needs and to provide more user-friendly and secure experiences for class members.
Rust Consulting, Inc. has been a leader in online claims filing systems from the technology’s inception. The firm administered In re Compact Disc Minimum Advertised Price Antitrust Litigation, MDL 1361 (D. Me.), one of the largest and most successful online claims platforms ever (3.4 million claims—98% of the settlement total—were filed online) and has continued to advance online claims filing. In previous monographs, we have discussed the Internet as it relates to notification; this monograph will discuss the history and recent developments in online claims filing, class members’ usage of these platforms and what the future may hold for online claims filing.n Perspectives
Early Online Claims Filing
Providing class members the ability to file claims electronically always has been an attractive idea to different parties for different reasons: it is convenient for those class members with Internet access; it reduces administrative costs and errors associated with the manual review of paper forms; and it cuts down on printing, postage and storage costs.
Despite the benefits, restraints on technology and Internet availability limited the number and types of settlements for which online claims filing was a feasible option. Typical online claims filing systems amounted to little more than a process through which a class member declared the intention to file the claim and possibly confirmed eligibility by answering a few simple questions. Any complexity built into the claims process made online claims filing difficult or impossible.
For example, including any documentation associated with a claim was a major hurdle. The general public was not yet familiar with the technology, including the hardware or software required to scan paper documents into image files or convert files created in a word processing or spreadsheet application into another file type. Moreover, file transfer systems—to say nothing of secure file transfer systems—were not widely used, making the submission of any documentation generally unavailable. Even questions regarding the legitimacy and security of “signing” an online-only claim form had to be resolved. Some early online claim forms required that class members complete the form online, but then print, sign and submit the printed claim form: appropriate at the time considering the questions surrounding the process, but hardly a total solution in hindsight.
Recent Developments
As one would expect from any computer- or Internet-related topic, online claims filing has come a long way in the past decade. Rust has incorporated online claims filing into more than 100 settlements, developing solutions for many of the above-listed issues and adding new features to handle changes in settlements.
First, class members can now include much more claim-specific information with their online claim. In a series of antitrust settlements, Rust designed websites that accommodated a claims-filing system that the parties to settlements have referred to as a “tiered approach.” In this approach, defendants provided Rust with purchase information for some class members. Class members then had the option of listing their eligible purchases through the settlement websites and submitting them online without documentation. So long as those purchases did not exceed a predetermined award threshold and weren’t otherwise deficient, those claims would be accepted. (Class members whose claims exceeded pre-determined limits would fall into a secondary tier, and thus be required to submit documentation to support the additionally claimed amounts or quantities.) Similarly, on a number of cases where the defendants could provide purchase information, claims up to each class member’s preauthorized amount were approved without further documentation.
Another logical step in the development of online claims filing systems has been allowing class members to submit documentation of their claims online. In one recent settlement of a lawsuit alleging improperly marked-up fees, class members could receive partial reimbursement for claims if they submitted copies of receipts showing the fees paid. Rust’s online claims filing system allowed class members to upload images in one of several formats (.pdf, .tif or .jpeg) along with their claims and submit them online.
Creating secure systems to link existing claim records to new or supplemental claim information has been a simpler way to allow class members to correct or update their claims. In a recent indirect purchaser antitrust settlement, class members were informed via email of an opportunity to append their claims. Class members who clicked the hyperlink could submit information that was linked to their unique claimant records. Yet for security reasons when using this type of technology, Rust does not allow class members to view or modify existing claim data.
Finally, certain settlements incorporate more than just claim information. Rust has incorporated product fulfillment into online claims processing systems. For a consumer settlement that required class members to return a product, the final step of online claims filing prepared a shipping label through a national shipping firm for the class member, who could then print the shipping label and use it to send the product at no cost.
Usage
As discussed in the Rust monograph Anticipating Claims Filing Rates in Class Action Settlements, by Tiffaney Allen, Esq., predicting claims filing rates in class actionsettlements is not an exact science. This also holds true for the online aspect of claims.
General Internet use, as one might intuit, has greatly expanded since the early days of online claims filing. In March 2000, The Pew Internet and American Life Project1 surveys reported that 62 percent of adults used the Internet. Of those Internet users, 49 percent bought products online and just 17 percent had done banking online. In December 2008, 74 percent of adults used the Internet, 71 percent bought products online2 and 55 percent conduct banking online. The numbers are even higher for younger adults, with 87 percent of adults aged 18-29 using the Internet.
Given this massive increase in Internet use—including for relatively personal and sensitive activities such as purchasing and banking—it is not surprising that class members, the parties and the courts would feel more comfortable filing or managing claims online in 2009 than they did in 2000.
Evidence of this increasing comfort with online claims filing platforms can be found in several recent large antitrust settlements. More than 600,000 claims were filed in one such direct and indirect purchaser settlement. Of these, nearly 89 percent—more than 537,000 claims—were filed through the settlement website.
The usage of online claims filing systems has also facilitated the administration of class action settlements internationally. Prior to its use, international administration was problematic, typically with relatively few class members necessitating expensive international postage rates and cumbersome telephone system adjustments. This is no longer the case, as evidenced by a recent, large copyrights-related settlement in which Rust maintained a website that allowed class members worldwide to file claims in 36 different languages.
Future
With class members having proved their willingness to file claims online—indeed, to use the Internet as a part of daily life and commerce—it stands to reason that the online aspect of class action settlement administration will continue to grow. And with the increased efficiency and reduced costs online claims filing and management afford, all of the parties to class action settlements will continue to welcome the option. One likely development will be the increased use and robustness of web “portals,” mechanisms through which authorized parties can view and edit claim information.
Portals are already used to allow claims administrators and attorneys to share information. As privacy and security issues are continually addressed, class members could increasingly have the ability not just to file their claims online, but to use such portals established by claims administrators to supplement, edit or simply view the status of their claims. Such online management would not only reduce the need for phone calls or traditional mail, but provide added convenience for class members. Such portals will also enable the parties to review and run queries on up-to-the-second data.
However, despite increasing use and robustness of online claims filing and administration features, certain factors will prevent settlements from eliminating traditional paper notice and claims with call center support. Especially for class action settlements whose class members are primarily of certain demographics, Internet-based (or at least Internet-only) claims processes simply are not a realistic option. For example, while 87 percent of adults 18-29 use the Internet, that is true of only 41 percent of adults age 65 and up.
The developments in online claims filing and claims administration over the past decade demonstrate that while its use may not be exclusive of more traditional methods, technology will continue to support changes in settlement structures, provide cost efficiencies to the administration process and allow increased convenience for class members.
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1 www.pewinternet.org
2 The percentage of Internet users who bought products online is from December 2007, the most recent Pew poll in which the question was asked.
By Thomas Glenn, Executive Vice President, August 2009