Despite Recent Case, ERISA Suits Can Have Legal Fees Covered

The Employee Retirement Income Security Act is a law that is often cited when issues regarding retirement benefits occur. It has been a major help for people in Texas who have seen their employee rights infringed upon, and in one recent case, the complex nature of ERISA and the law's reach were highlighted.

This particular case involves a woman who became a widow after her husband lost his life in a motorcycle accident. The insurance company denied accidental death and dismemberment benefits to the woman and because of this, she filed an ERISA lawsuit. The court awarded her the amount of money she was seeking for the insurance: $400,000. However, the complications began soon after when she filed a motion to have her legal fees covered. Totaling $212,000, the amount was no small sum. Though such fees can be covered in an ERISA lawsuit, hers were not because the judge said that it was up to his discretion whether or not her legal fees be paid by the insurance company. Had the provider behaved in bad faith, the judge would have likely required the fees be covered. But he decided that the insurance company performed as it should have, forcing her to pay the sum, accounting for more than half of her insurance claim.

Though it did not happen in this case, ERISA lawsuits can end with attorneys' fees covered by the defending party. There are certain parameters that must be met before such a motion is filed though. These include filing a lawsuit and exhausting any options of administrative appeal before that. The lawsuit must see some degree of success as well. The defining factors for the required amount of success were set in a previous U.S. Supreme Court case.

If you plan to file an ERISA claim, it is wise to speak with an attorney, especially if you want to have the fees associated with the lawyer covered. She or he will likely know what needs to be done in order to make this happen.

Source: Lawyers and Settlements, "ERISA Does Not Automatically Provide Awards for Attorney's Fees" Heidi Turner, Jul. 03, 2013