Court Awards Attorney’s Fees After Disability Insurance Claim is Remanded Back to Sun Life

When suing an insurance company to recover disability benefits in an ERISA case, the three most likely outcomes by the court are; (1) awarding past benefits, (2) sending the claim back to the insurance company for further review (remand), or (3) finding in favor of the insurance company. The first and second outcomes are a win for the Plaintiff after which the court has discretion to award attorney’s fees and costs. It is very common for a judge in an ERISA case to forego awarding benefits to a Plaintiff, and instead remand the claim back to the insurance company for further review to determine whether benefits should be approved.

A remand back to the insurance company is a definite victory for a plaintiff as their claim is still very much alive. Insurance companies often argue that a remand should not be considered a win or “success on the merits” of a claim as there was never a determination that the Plaintiff was actually entitled to benefits. However, as you will see, courts are disagreeing with defendants and awarding fees based on remand alone.

In a recent case out of Massachusetts, Gross v. Sun Life Assurance Company of Canada, the Court held that the Plaintiff was entitled to an attorney’s fees award after determining that an award of benefits to the Plaintiff was not yet warranted, but rather that the case should be remanded back to Sun Life for further consideration. The First Circuit in Gross, effectively determined that a remand alone equals enough “success on the merits” to validate an award of attorney’s fees.

Court States Remand Is Possibly Best Outcome Plaintiff Can Hope to Achieve

In Gross, Sun Life argued that a remand on its own does not constitute success “on the merits,” and it only can only be considered a “purely procedural victory” that does not justify a fee award. The court in Gross ordered Sun Life to render a new decision that included reconsideration of videotape evidence that was not fairly examined during the original administrative process. The Court was not persuaded by Sun Life’s argument that an award of some amount of benefits is necessary to be considered success on the merits. The court commented that “indeed, a remand for a second look at the merits of her benefits application is often the best outcome that a claimant can reasonably hope to achieve from the courts. To classify such success as a minimal or “purely procedural victory” mistakes its importance. Gross secured a ruling on the standard of review that improved her likelihood of success on the merits of her claim and will impact all similar future claims. It thus provided — “some concrete gain for the claimant.”

Gross is an important ruling for all ERISA plaintiffs who secure a remand order from the court, as it is pretty clear that “success on the merits” of their claim is not measured by whether they are actually awarded monetary benefits by the court.

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