When it comes to long-term disability (LTD) claims under the Employee Retirement Income Security Act (ERISA), many claimants wonder if they can recover attorney fees if they win their case. The short answer is yes, it’s possible to recover attorney’s fees in an ERISA LTD claim, but it’s not guaranteed.
The Legal Basis for Attorney Fees in ERISA Claims
ERISA, a federal law that governs most employer-sponsored disability insurance plans, includes a provision under 29 U.S.C. § 1132(g)(1) that gives courts the discretion to award reasonable attorney’s fees and costs to either party in a lawsuit. This means that if you prevail in your ERISA LTD claim, the court may order the insurance company to pay your attorney’s fees. Conversely, if the insurer prevails, they may try to make you pay their attorney’s fees, although this is less common.
Factors Considered by the Court
The decision to award attorney’s fees is not automatic. Courts consider several factors, known as the “Chambless factors,” named after the case Chambless v. Masters, Mates & Pilots Pension Plan. These factors include:
- Degree of Culpability or Bad Faith: If the insurance company acted in bad faith or was particularly culpable in denying your claim, the court is more likely to award attorney’s fees.
- Ability to Pay: The financial status of the parties involved may affect the court’s decision. Generally, if the insurance company has significant resources, this weighs in favor of awarding fees to the claimant.
- Deterrence: Courts consider whether an award of fees would deter other insurance companies from similar misconduct in the future.
- Benefit to All Plan Participants or Significant Legal Issues: If your case provides a substantial benefit to other plan participants or resolves important legal issues under ERISA, the court may be inclined to award fees.
- Relative Merits of the Parties’ Positions: The court will evaluate the strength of each party’s case. A plaintiff with a strong case who prevails is more likely to be awarded attorney’s fees.
In practice, courts often look for evidence that the insurer acted in bad faith or that there was a significant benefit to other plan participants when awarding attorneys’ fees. The idea is to ensure fairness and to discourage improper denials of benefits by insurers.
Practical Considerations for Claimants
While the possibility of recovering attorneys’ fees exists, it’s important for claimants to discuss it with their attorney when considering litigation. Attorneys experienced in ERISA cases, such as those at the Ortiz Law Firm, can provide valuable insight into the likelihood of recovering these fees based on the specifics of your case.
In addition, Nick Ortiz and many other attorneys who handle ERISA LTD claims work on a contingency fee basis, meaning they only get paid if you win your case. This arrangement can reduce the financial risk associated with pursuing your claim, even if the court does not award attorneys’ fees.
Get Help with Your ERISA Long-Term Disability Claim
If you are facing a denial of your long-term disability benefits, consulting with an experienced ERISA attorney at the Ortiz Law Firm can help you understand your options and improve your chances of a successful outcome. An attorney knowledgeable in ERISA law can help you navigate the complexities of your case, advocate for the recovery of your legal fees, and ensure that your rights are fully protected.
If you need assistance with your ERISA LTD claim or have questions about recovering attorney fees, contact us for a free case evaluation. We’re here to help you every step of the way. Call (888) 321-8131 today to get started.
