Claimants who receive a denial of benefits under an ERISA-governed LTD plan must exhaust their administrative remedies by appealing the denial with the insurance company before filing suit in court. Once they have exhausted these administrative remedies, claimants then may seek relief in court. However, prosecuting an LTD appeal in federal court is rarely inexpensive, so many claimants wonder if they are entitled to attorney’s fees if they win their appeals.
Under long-term disability benefit plans subject to ERISA, a court may award reasonable attorney’s fees to the prevailing party to the dispute in an LTD appeal at the discretion of the court. Since the award of fees is entirely discretionary, however, there are no guarantees that a claimant will receive attorney’s fees, even if he or she wins the appeal. In the Ninth Circuit Court of Appeals, however, prevailing claimants in these cases are likely to receive an award of attorney’s fees, in an amount which must be verified by the overseeing judge, absent unusual circumstances.
Whether a claimant has sufficiently prevailed to justify an award of attorney’s fees is another open question. For instance, it is unclear if the claimant must prevail on only one or more aspects of the claim, or if the claimant must receive a monetary judgment to qualify for attorney’s fees.
Among the factors that the court can consider in determining an appropriate attorney’s fee awards in and LTD case include:
• The degree of the plan’s liability or bad faith in denying the claim
• The plan’s ability to pay the award
• Whether an award of attorney’s fees would deter others from acting in similar situations
• Whether the party requesting fees sought to benefit all plan participants or resolve a significant legal question
• The relative merits of each party’s position
If the claimant loses the appeal, the court may order the claimant to pay attorney’s fees to the plan or insurance company. However, if the court rules that the claimant brought the suit in bad faith, then it will more than likely order the claimant to pay attorney’s fees.
It can benefit you greatly to get legal advice about the most effective means of building and maintaining the most successful ERISA long-term disability claim possible. Bonnici Law Group provides skilled, aggressive legal representation regularly for individuals who are seeking long-term disability benefits under insurance policies governed by ERISA. Our priority is to represent your interests and protect your rights to the benefits that you deserve. Call us at 619-259-5199 and schedule an appointment to meet with us about your case today.