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Disability insurance claimants may be entitled to interest if benefits are wrongfully denied

When a disability attorney wins an ERISA claim for his or her client, it is common to ask for pre-judgment interest as part of the appropriate restitution. There is a valid reason for making this request. The disability insurance company prevented the Claimant from receiving their money and as a result the claimant lost interest on the money. Additionally, while the insurance company held back the claimant’s money benefits, the insurance company was investing and receiving interest on the money.

When a disability insurance plan has wrongfully denied benefits, it is reasonable to request pre-judgment interest to fully compensate someone who was a rightful beneficiary of long-term disability benefits and was denied their rights.

Factors Courts Consider when Awarding Pre-judgment Interest for Disability Claims

Whether the Claimant Delayed Filing a Lawsuit

The Court may take into consideration whether the claimant appears to have deliberately waited for as long as possible before filing a lawsuit. This is yet another reason why filing timely appeals and filing an ERISA suit within a reasonable time after final denial of benefits has been issued can work to a claimant’s benefit. When the Court can see that it was the long-term disability insurance plan administrator that was clearly at fault, and the claimant did not delay the progress of the claim, this can work in the claimant’s favor.

Whether the Disability Insurance Company Was Culpable

Not only does culpability impact the Court’s decision on whether to order a disability plan to pay attorney’s fees it also has an impact under ERISA on whether the Court will order a disability plan to pay pre-judgment interest. If a decision was a close one and could be seen as partially supported by the evidence, the Court may find that pre-judgment interest is not justified.

Whether Awarding Pre-Judgment Interest Is Mandated

Prejudgment interest it not mandated under ERISA. It is allowed. It is “a question of fairness, lying within the court’s sound discretion, to be answered by balancing the equities.” (See Shaw v. Int’l Ass’n of Machinists & Aerospace Workers Pension Plan.) When the Court finds that awarding pre-judgment interest balances the equities, then making the award becomes logical.

Guidelines Used to Calculate Pre-judgment Interest for Successful ERISA Claims

While there have been some District Court decisions that have upheld using state statues for calculating the appropriate interest rate for specific interest claims, in general an effective argument must be presented to the Court to justify doing so. In the case of Sherri Kay Smith v. American International Life Assurance Co. of New York, the Court recognized that federal courts often look to state law for guidance when ERISA is silent, as it is on pre-interest judgment. In this case heard in 1995, the Court used a state statute to establish a rate of 18% per annum.

States have a variety of methods for calculating pre-judgment interest, so in the effort to secure uniformity under the Employee Retirement Income Security Act (ERISA), the Courts have developed specific guidelines. Since Blankenship v. Liberty Life Assurance Co. of Boston, District Courts have found that the interest rate prescribed under 28 U.S.C. § 1961 for post-judgment interest is also an appropriate guide for pre-judgment interest.

Section 28 U.S.C. § 1961 establishes a precedent where post judgment interest is calculated at a rate equal to the weekly average 1-year constant maturity Treasury yield.” The Court uses the rate published by the Board of Governors of the Federal Reserve System during the calendar week that proceeds the date of the judgment.”

In Nelson v. EG & G Energy Measurements Group, Inc., the court found that calculating the pre-judgment interest rate based on the average 52-week Treasury bill rate operative immediately prior to the date judgment made the most sense, as this would compensate adequately based upon actual market values during the time benefits were withheld.

The Court may then decide that the best method for calculating the pre-judgment interest involves calculating interest as though the plaintiff had invested the money, rather than spending it, at the 52-week Treasury bill rate. Then the Court calculates what would happen if the compound interest was reinvested annually at this same rate. This could enable the Court to establish a fair level of compensation for pre-judgment interest. The problem with a court relying on the 1 year constant maturity yield is that it is less than 1%, which is much different than most state judgment interest rates which exceed 6%. Courts have the discretion to choose a reasonable interest rate. In most of our cases we will consult with an accounting expert to advise the court on reasonable interest rates that should be used.

Importance of Asking for Pre-judgment Interest

It is vital that a disability attorney not overlook the value of making a request for pre-judgment interest as part of the lawsuit. It isn’t enough to move for summary judgment. Courts can issue summary judgment and not award pre-judgment interest.

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New York Life

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Reviewed by Heather on October 3rd 2024 Verified Policyholder | August 2024 date of disability

This company sucks when it comes to disability claims. They are slow at processing stuff, then they always say they didn't recieve the doctors information. You spend your ... read more >

MetLife

They FULL OF ****

Reviewed by KM on October 3rd 2024 Verified Policyholder | August 2024 date of disability

MetLife is what everyone on this review are saying. They don't contact you to let you know what's going on with your claim or to let know you need additional info. I had a... read more >

Sedgwick

Worst Company Ever

Reviewed by RobRob on September 23rd 2024 Verified Policyholder | August 2024 date of disability

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MetLife

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Reliance Standard

Short Term Disability Claim/Inconsistent to NO Communication

Reviewed by GaKRN on August 22nd 2024 Verified Policyholder | June 2024 date of disability

When I did call & reach a live person they were kind & helpful. The person assigned to my claim left one phone message & I have not spoken to her since. Information she re... read more >

Unum

Unum Closed My Case Today

Reviewed by Scott C. on July 5th 2024 Verified Policyholder | March 2023 date of disability

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Hartford

Ran me Around for Months

Reviewed by David on July 5th 2024 Verified Policyholder | January 2024 date of disability

Scammers. Immoral horrible people.

Reply

Sent on July 5th 2024 by Attorney Gregory Dell

David:

It’s horrible that Hartford did that to you.

Prudential

Denied but Not Denied but I am Denied

Reviewed by KDDK on July 5th 2024 Verified Policyholder | August 2022 date of disability

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Reviews from Our Clients

S.S.

I am a physician in my 30s who was practicing in my hospital based medical specialty until my Multiple Sclerosis diagnosis began to severely limit my physical ability to work.

My husband and I were obviously in distress at these very unwanted life changes and frankly overwhelmed with the possibility of a long and traumatizing legal battle ahead of us. We knew we were legally entitled to benefits through the separate private individual and employer based ERISA disability insurance policies we had, but even cursory research and discussion with colleagues made it clear that insurance companies will strategize with their own legal teams to find ways to not pay out benefits. We found many before us who had fallen unwittingly into legal pitfalls that prevented them from ultimately obtaining benefits. We realized we needed to seek legal counseling.

We found Dell Disability Firm through their youtube channel where their associates have videos discussing the legal intricacies and latest developments in private disability law. I was impressed by their dedication to the field and reached out through their website to request a free consultation.

We were delighted to hear that Mr. Steven Dell himself would be willing to take our case and felt assured that we would be represented by the best of the best.

We have not been disappointed in our expectation and have, in fact, been consistently very impressed. Steven Dell is clearly both knowledgeable and wise about dealing with these issues but more importantly, has shown kindness and impeccable honesty at each step of the way.

Merlin has demonstrated a very high capacity for organizing and handling the endless myriad of documents and communications between us and the insurance companies. She has also been very compassionate, accessible and forthcoming in dealing with our many anxiety fueled emails and telephone calls to her and we are very grateful for her involvement.

For over 7 months, we have been working closely with Steven Dell and Merlin Bryan from Dell Disability Lawyers as they have guided us through the process of review and initial application for benefits from our two insurance policies (Hartford and Ameritas).

We are happy to announce we just received approval of claim from the Hartford insurance company.

At this time we are still working with this firm as we await the final decisions from Ameritas policy that we are hopeful will have a similar outcome.

As anyone with a chronic and progressive illness can tell you, time becomes a very precious commodity. Through their representation, Dell Disability Associates has allowed us to focus the majority of our time enjoying the time and function I have left while resting assured that our disability case laid in competent and caring hands.

The truth is that no amount of money can make up for what we have lost, but it is a huge comfort to have a team like Dell Disability Lawyers at our sides to help us ensure we will be able to continue to care for ourselves and our families.

We highly recommend Dell Disability Lawyers, Mr. Steven Dell and Ms. Merlin Bryan to handle your disability insurance claim.

Thank you Steven, thank you Merlin!

We will certainly plan on leaving another review for completeness once we have our final decision from Ameritas.

Paula B.

I have been working with Dell Disability Lawyers for the past 5 years concerning my disability as it pertained to my employer. I have been more than pleased with them the entire time. They have always kept me informed of any paperwork needing completed or any changes coming ahead. Nothing has been a surprise. I would recommend them to you to help with your disability case if you’re trying to dip into the policy you’ve been paying for.

Michael M.

I am a physician who has been disabled for over 10 years. During this time I have been represented by Cesar Gavidia and his assistant Danielle Lauria. Their representation on my behalf has allowed me to concentrate on dealing with my disability/disease process and all associated complications and not having to deal with all the things that are necessary in a disability claim. Based on my personal experience from many years of practicing medicine I would consider their work product, insight and effort in the disability claim procedures to be superior. I would recommnend them, which I have done, with my highest level of confidence. In short, you well served with this practice.

Dan P.

I had to retire from my career due to a bad back that restricted me from performing my duties. I had LTD insurance and after a few years of receiving monthly benefits from this insurance company, they notified me that my benefits were terminated stating that I don’t qualify due to my duties not fitting into some “national job description” and a nurse had deemed me eligible to go back to work. Its a crushing feeling to have this told to you over the phone with hardly any information given. Luckily, I came across Dell Disability Lawyers and spoke with Attorney Palamara who calmed me down and stated they would take my case. Within a couple of months my benefits were restored, and I had piece of mind. I cannot thank Attorney Palamara and the staff enough at Dell Disability for their professionalism, no nonsense approach, personal and timely communication and quick ability to litigate my case.

Jen S.

I wanted to thank Mr. Symonds and his legal assistant Sonia for their professionalism, guidance and dedication towards my LTD claim. Going through the denial process on my own was going to get me sicker and knew it was time for help right away. I reached out to Dell Disability Lawyers for assistance and not too long after my call, I was connected with Sonia – Soon after that, I was talking about my case with Mr. Symonds. After a long and tedious process with the LTD insurer, we won the case. The wait can absolutely be lengthy, but in the end, it was all very much worth the fight. Thank you both so much for all that you have done for me! I also want to thank those who assisted in keeping me updated, as needed. Highly recommended for anyone who is going through the brutal process of an LTD denial.

Carl G.

I would like to thank Dell Disability Lawyers for taking care of my case and help me get the insurance coverage that I was rightfully in need of. Specially, I would like to thank Lawyer Alexander Palamara and RIGHT-HAND legal assistant, Sonia Nogueira, who made this process less stressful. They answered all my questions and kept me informed every step of the way.

Don’t get me wrong. They never promised or told me that I was going to win my case, as no one can guarantee that for you. What they did do, was letting me know that they were working hard for me and to keep positive. Something that I recommend everyone to do is to subscribe to their YouTube channel. That will give you an idea on how they operate and why they (for most of their cases) win their cases.

Since I was awarded disability, I am still having surgeries and thanks to Dell Lawyers, I’ve been able to cover all those expenses.

Warm regards to everyone at Dell.

Clarisa B.

I’m so very Grateful and Thankful for the team at Dell. They worked tirelessly to get the best outcome for me. I’m so glad that I found them!!

Carole S.

Exceptional efficient and professional service from Jay Symonds and Sonia Nogueira. They were both so helpful and knowledgeable and navigated me through a very stressful and difficult situation with New York Life.

K. S.

Awesome team. Jay and his team, Sonia and Francesca, truly care. This team is very Professional and quick to respond. Jay always provided answers in detail to my questions. I strongly recommend Jay Symonds.

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