Court of Chancery Denies Lead Plaintiff’s Application for Incentive Fee from Overall Fee Award
Morrison v. Berry, C.A. No. 12808-VCG (Del. Ch. July 12, 2021)
Delaware courts generally do not award special compensation to lead plaintiffs in class action litigation. Delaware courts typically limit awards to out-of-pocket costs and expenses, unless lead plaintiffs take on extra—essentially, exceptional—burdens in the litigation. Submitting a modest award request does not necessarily portend success that an applicant will receive an award.
In Morrison, lead plaintiff submitted a modest request for an incentive award of $5000, to be paid from the overall attorneys’ fee award to her counsel. Distinguishing her work from past plaintiffs, who had devoted hundreds of hours of time offering their expertise or thousands of hours engaged in the mechanics of litigation (such as reviewing documents and identifying key ones), the Court of Chancery denied her application for the incentive award. The Court reasoned that her participation over several years of litigation involved the kind of activity—such as reviewing pleadings that she was required to verify—that the Court expects of all litigants. The Court was wary of establishing a new precedent that would support giving class representatives such an incentive award in the future.Share