There are times when a court may award attorney fees in ERISA disability cases. If your group disability claim enters into the litigation phase after the administrative appeal has been exhausted, you have the right petition the court to have the other side pay attorney fees. But there’s a catch.
As our video states, the decision to award attorney fees and court costs to the claimant is completely up to the judge. You need to show “some degree of success on the merits” of your case. The judge also sets the percentage of the fees the insurance company must pay. This can result in the insurer getting away with paying a lot less than what you might consider to be a “reasonable” amount of lawyer fees.
The discretionary ERISA rule is found in 29 U.S. Code § 1132 (g)(1) – “…the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.”
What’s the catch? Courts only award attorney fees for legal work done after the appeal.
The drawback is that any award of attorney fees is allowed only after the appeals phase of the claim. If your attorney appealed your case and won on appeal—meaning the insurance company reversed its decision or otherwise settled without litigation—you could not recover lawyer fees.
An experienced attorney’s representation during the disability appeal phase is fundamental to building an administrative record that will stand up in Federal court in a lawsuit. Why? Because when a group disability claim ends up in court, the administrative record is the only thing a judge will review. A strong appeal can also cause a fair settlement to be reached prior to ERISA federal litigation.
Either way, a great deal of legal work goes into the appeal – it is the very thing that may ultimately win the case, either with or without litigation. And that time spent by the attorney cannot be recovered by the claimant.
These contradictory rules of ERISA force you to complete all administrative appeal remedies before you can file a lawsuit. Yet ERISA does not allow an award of attorney fees for any time your lawyers spends on this work.
This is yet another hardship placed on claimants by ERISA.
If you have questions about your group long term disability claim, contact us for a complimentary, risk-free consultation. When you become our client, we set out to make the entire process as easy as possible for you.
We offer a free consultation, and most of our long term disability cases are taken on a contingency fee: you pay nothing unless we secure a settlement or recover for you.