Can I Get My Attorney’s Fees Paid by My Long Term Disability Insurance Company?

What You Should Know:

• ERISA allows courts to award attorney’s fees and costs at their discretion under 29 U.S.C. § 1132.
• The Supreme Court’s decision in Hardt v. Reliance Standard Life Insurance Company set the standard for when a claimant can recover attorney’s fees (i.e. “some degree of success on the merits”).
• Courts interpret “some degree of success on the merits” in a number of scenarios: remands, voluntary benefit reinstatement, and other favorable outcomes may qualify.
• Dabdoub Law Firm has extensive experience in ERISA disability litigation, with a proven record of winning benefits and fee payments  for clients nationwide.

Overview of ERISA’s Fee-Shifting Provision

Under the Employee Retirement Income Security Act (“ERISA”), courts have discretion to award attorney’s fees and costs in actions brought by plan participants, beneficiaries, or fiduciaries. The relevant statute, 29 U.S.C. § 1132(g)(1), provides:

“In any action under this subchapter… the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.”

Unlike most civil fee-shifting statutes, ERISA does not limit fee recovery to a “prevailing party.” Instead, the statute allows courts to award fees to either side based on the equities of the case. In other words, the courts can award the winner or loser of the case attorney’s fees if there was some success on their part. 

In practice, however, Courts rarely award fees to the defendant insurance company in a long-term disability benefits lawsuit. Instead, disability claimants is the party who tends to be awarded fees.

The Supreme Court’s Standard: Hardt v. Reliance Standard Life Insurance Company

The landmark decision in Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010) reshaped how ERISA fee awards are analyzed by federal court judges. 

Key Holdings in the Case

1. No “Prevailing Party” Requirement: Fees may be awarded to either side, not just the party who wins outright.
2. “Some Degree of Success on the Merits”: To be eligible, the claimant must achieve more than a trivial or procedural victory.

The Court emphasized that courts should not engage in a “lengthy inquiry” into whether the victory was substantial, but it must reflect a meaningful, merits-based outcome.

What Qualifies as “Some Success on the Merits”?

While Hardt did not provide a definitive explanation, courts since have clarified what types of results satisfy this standard.

Examples of Success That Qualify:

• Granting a Motion to Dismiss or Remand: Courts have found that dismissals or remands can demonstrate sufficient success when they reflect a substantive review of the claim.
• Remand to the Plan Administrator: A remand that requires meaningful reconsideration of benefits, not just a procedural correction, often qualifies as success on the merits.
• Catalyst Theory / Pre-Judgment Relief: Claimants can recover attorneys fees even when the disability insurer voluntarily reinstates long term disability benefits after a lawsuit is filed if the litigation caused that outcome.            
• Court Win: A court finding of disability and order for the insurer to pay benefits

In other words, if the lawsuit pressured the insurer to reverse its decision or pay long term disability benefits, that is often enough. 

When Fee Awards Are Denied

Courts generally deny fees for purely procedural victories: those that do not move the claimant closer to substantive relief.

Examples include:

• Winning a remand on a narrow legal or procedural issue (Alexandra H. v. Oxford Health Ins., 2018 WL 7077873 (S.D. Fla. 2018))
• Success on motions unrelated to benefits recovery (e.g., class certification or discovery disputes)
• Remands that involve only technical compliance, without reviewing the merits of the claim (Vivas v. Hartford Life, 2013 WL 5226720 (S.D. Fla. 2013))

The Five-Factor (Freeman) Test in the Eleventh Circuit

Once a claimant meets the Hardt threshold, courts often apply a discretionary five-factor test to determine whether to award fees. In the Eleventh Circuit, these are known as the Freeman factors (Freeman v. Continental Ins. Co., 996 F.2d 1116 (11th Cir. 1993)):

1. The degree of the opposing party’s culpability or bad faith
2. The ability of the opposing party to satisfy an award
3. Whether an award would deter similar conduct
4. Whether the fee claimant sought to benefit other plan participants or clarify significant legal issues
5. The relative merits of the parties’ positions

1. Culpability or Bad Faith

Bad faith requires deliberate wrongdoing; culpability can arise from carelessness or disregard for evidence. Courts often find culpability where insurers ignore medical evidence or act arbitrarily. (Shultz v. Aetna Life, Campbell v. United of Omaha)

2. Ability to Pay

Courts routinely note that insurers have ample resources. While not decisive alone, it supports awarding fees. (Gross v. Sun Life, 763 F.3d 73 (1st Cir. 2014))

3. Deterrent Effect

Fee awards deter insurers from unreasonably denying claims and encourage fair claim reviews. (Shultz, Mundrati v. Unum Life, Curtin v. Unum Life)

4. Benefit to Others or Legal Significance

Courts favor awarding fees when cases advance ERISA law or benefit plan participants broadly. (Mundrati, Campbell)

5. Relative Merits

If the claimant ultimately wins or benefits are reinstated, courts usually weigh this factor in the claimant’s favor. (Shultz, Glover v. Hartford Life)

Procedural Rules for Seeking ERISA Attorney’s Fees

Federal Rule of Civil Procedure 54(d)(2)

• Motions for attorney’s fees must be filed within 14 days of judgment.
• The motion must specify the legal basis and amount (or estimate) requested.

Local Rules

• Southern District of Florida: Rule 7.3 allows 60 days after judgment to file and requires good faith efforts to resolve disputes.
• Middle District of Florida: Rule 7.01 requires a bifurcated procedure; entitlement must be established before the amount is determined.

Key Takeaways

• ERISA’s fee provision is broad: Courts may award fees whenever the claimant achieves “some degree of success on the merits.”
• Remands and voluntary benefit reinstatement can trigger fees: Even without a trial or judgment, success that changes the insurer’s position can justify fees.
• Bad faith not required: Culpability or careless claims handling may suffice.
• Procedural matters: Fee motions must be timely and supported by specific legal grounds.

Dabdoub Law Firm: National Leaders in ERISA Fee and Disability Litigation

Dabdoub Law Firm has successfully represented clients nationwide in complex ERISA disability cases, including those involving attorney’s fee disputes. Our firm focuses exclusively on disability and life insurance claims, and we have taken on every major insurer. With a proven record in federal court and deep knowledge of ERISA’s fee-shifting rules, we help clients recover both the benefits and the fees they deserve.