ERISA litigation can be a long, complicated, and arduous process. Knowing the basics will help you decide whether litigation is right for you.
When Your Lawsuit May Be Commenced
A lawsuit cannot be commenced until the insured has exhausted all administrative remedies. Typically, this means that an insured must file an administrative appeal and receive a final denial. Some policies require multiple administrative appeals - others only require one.
ERISA litigation must be initiated within a certain period of time, which is often restricted by the insurance policy. You should consult with an attorney to determine how long you have to file suit.
Who You'll Sue
You will almost always sue the insurance company, rather than your employer. However, there are certain circumstances where your employer and/or the plan may also be sued as separate entities. You should consult with an experienced ERISA attorney to determine the proper parties to name as defendants.
Filing the Summons and Complaint
Your attorney will initiate the lawsuit by filing a summons and complaint in federal District Court. These documents will notify the defendant of your lawsuit and explain why you are pursuing legal action. The summons and complaint must be served upon the defendant within a certain period of time, which should be determined by your attorney.
Defendant's Answer and Counterclaims
Once the defendant has been served, it will file an answer. The defendant's answer will respond to the allegations set forth in the insured's complaint.
The defendant may also file a counterclaim. The most common basis for a counterclaim is where the insured was paid benefits under the plan, but later received income from another offsetting source (i.e., Social Security Disability Insurance, Workers' Compensation, settlement of another related lawsuit, etc.). If Defendant asserts a counterclaim, your attorney will file a responsive pleading known as a reply.
Working Toward A Settlement
Once the lawsuit has been commenced and the defendant has answered, your attorney may wish to initiate informal settlement discussions by making a settlement demand. The amount of the demand will depend on your claim value, the applicable burden of proof, and the merits of the claim.
The defendant will typically review the demand and make a counteroffer. Thereafter, the parties will usually exchange numbers several times in an effort to reach a mutually agreeable settlement amount.
Of course, the parties are not always able to reach a settlement through informal discussions. The likelihood of reaching a settlement depends on a number of factors, including: the insured's goals; the applicable standard of legal review; the strength of the insured's claim; and the willingness of the insurance company to engage in good faith settlement discussions.
If the parties experience difficulty reaching a settlement on their own, they may agree to pursue mediation. In certain circumstances, the court may even require the parties to pursue mediation. The mediator will serve as mutual liaison between the parties to assist them in reaching an agreeable compromise. However, neither party is obligated to settle during mediation.
The length of settlement discussions varies greatly from case to case. A settlement may be reached during a single conference in one case, while another case may involve months of discussions and/or a mediation before a settlement is reached. In some instances, settlement is never reached.
If the parties are not interested in settlement or a settlement cannot be reached, they will likely engage in discovery before going to trial.
During discovery, your attorney will make numerous demands for the defendant to produce information and/or documentation relating to your claim. Your attorney may also take depositions of insurance company employees who were involved in your claim. In rare cases, your attorney may even obtain expert testimony in your case.
The defendant will usually object to many of the discovery demands, which can result in delays and numerous arguments before the court. If the defendant makes objections, your attorney will advocate on your behalf by arguing that the information and/or documents requested are relevant, permissible, and necessary. Often times, the parties are able to resolve discovery disputes without the intervention of the court.
Motion for Summary Judgment
Both parties can make a motion for summary judgment during or following discovery. A motion for summary judgment requests the judge to make a decision based on the undisputed facts without going to trial.
Typically, your attorney will argue that your case should be granted based on the undisputed facts. Defendant will argue that your case should be dismissed based on the undisputed facts.
If the judge grants your motion, you win the case. If the judge grants defendant's motion, you lose. If the judge denies both parties' motions, then the case goes to trial.
Further ERISA Disability Litigation and Trial
If the case is not resolved by settlement or on a motion for summary judgment, the parties will go to trial. Trial will involve many hours of intense legal preparation and drafting. Typically, numerous briefs and reply papers must be filed. Oral arguments may also be held. Trial is a long and tedious process which the parties usually try to avoid. However, sometimes going to trial becomes necessary.
The Final Order
After going to trial, the judge will issue a final order and decision. The judge may deny or grant your case in whole or in part. If the judge denies your case in whole or in part, your attorney will discuss your options for further appeal.
Experienced ERISA Disability Litigation Team
Riemer Hess's experienced ERISA litigation team will zealously advocate on your behalf in court. We understand how stressful litigation can be are we are here to help. Contact an ERISA litigation attorney at Riemer Hess today to discuss your options.