One of the only saving graces of disability cases falling under the ERISA regulation, is that if the Court decides that we have had “success on the merits” of the claim on behalf of our clients, the Court may, in its discretion order that our counsel fees must be paid by the insurer. This is so important, because without that happening, when we win cases in litigation in federal court, our client pays our contingency fee from the settlement or judgment.
On June 26, 2015 we blogged on the issue of counsel fee awards in ERISA claims and explained how the court may decide that a claimant’s attorney’s fees are paid by the insurer. To receive attorney’s fees from the insurance company rather than our client, the court must conclude that we have achieved “some degree of success on the merits.” Then it must then determine the appropriate amount which is based on our timekeeper records of our legal work on the case multiplied by a lodestar, an hourly rate. Keep in mind that our clients only pay us for litigation on a contingency basis; that means, if we win the case, they pay a set percentage of the award, not by the hour.
Over the years, courts have awarded our firm, particularly, Bonny G. Rafel, Esq., counsel fees to be paid by the insurer. This obviously reduces our client’s burden of paying our fees. We would love nothing more than to get our clients all of the disability benefits they deserve, and be paid for our efforts by the insurance company who terminated or denied the benefits in the first place.
Even when we are successful in litigation, the insurer has argued that the fees should be reduced for one reason or another. They have often tried to reduce fees based on what they think would be fair, and sometimes even try to get a “southern NJ” rate, (if our cases are in Federal Court in Trenton) suggesting that lawyers working in south New Jersey charge less than the northern NJ, Manhattan corridor amount.
On May 20, 2015 the Third Circuit Court of Appeals heard oral argument in one of our cases, and after deciding in favor of our client, ordered that the insurance company, Liberty, pay all of our legal fees associated with the Third Circuit Appeal. Moreover, the Third Circuit determined that the hourly rate for counsel, Mark Debofsky, Esq. counsel from Chicago, Illinois should be $600.00 per hour and the hourly rate for counsel, Bonny G. Rafel, counsel from Florham Park, New Jersey should be $500.00 per hour.