Benefits & ERISA Law

Does David Have to Pay Goliath if the Slingshot Misses Its Mark?

Fee shifting provisions, such as the one in the ERISA statute, that authorize a court to award attorney’s fees to a prevailing party, are facially neutral, and allow for an award in favor of the prevailing party, whomever that may be, and against the losing party, again whomever that may be. But should attorney’s fees be awarded to a large plan or administrator, such as a multimillion or billion dollar pension plan, from a plan participant who has lost a case seeking benefits that he or she believed was owed under the plan’s terms? In essence, does a facially neutral fee shifting statute really require David to pay Goliath?

The elements that are to be considered in ruling on an award of attorney’s fees under ERISA are, like the statute’s fee shifting provision itself, facially neutral; they do not presuppose that any particular type of party is more or less entitled to an award of attorney’s fees than any other party, nor that any particular type of party is entitled to protection against being hit with such an award. But the devil, as always, is in the details or, perhaps more accurately when, as in this case, broad open ended standards in the law are applied to a particular case, in the application of the standard to the concrete facts before the court. And as this case here, and Roy Harmon’s discussion of it shows, the application of those elements to this type of scenario tends to end up with a finding that the individual plan participant who has lost a case against a large plan does not have to pay attorney’s fees to the prevailing defendant.

Full post as published by Boston ERISA Law Blog on October 15, 2008 (boomark / email).