A long-term disability (LTD) insurance policy is meant to award policyholders a part of their monthly wages for a predetermined period should they become disabled and unable to work because of a covered injury or illness. Employers often offer this policy as a benefit, but individuals can also purchase it. If you must take some time off duty because of a health condition, you could bring an LTD claim to your insurer for benefits as you recuperate.
However, more frequently than most people realize, LTD insurers wrongfully delay or deny disability claims. If that happens, you may need to hire an LTD attorney for help, which may raise your approval chances. But you might be concerned about how you will afford a reputable attorney, considering your inability to work, dwindling income, and wrongfully denied disability claim. Understanding how much LTD attorneys charge and how their fee structure works can assist you in making informed decisions about proceeding with your insurance claim. Keep reading to gain more insight.
How LTD Attorneys Charge Their Clients
Unlike other forms of attorney representation, LTD attorneys generally work on a contingency fee basis. That means these lawyers do not request upfront fees for their service. Rather, your attorney's fees depend on your case outcome—they only receive payment if you prevail. Put otherwise, they will be paid from the LTD benefits you recover.
The attorneys usually receive between 25 percent and 40 percent of the plaintiff’s monthly benefits or recovered long-term disability settlement value. So, if, for example, you win fifty thousand U.S. dollars in your LTD claim, your lawyer may charge you anywhere between twelve thousand and twenty thousand U.S. dollars. Your lawyer will not collect any fee if you do not win your case.
The contingent fee arrangement makes attorney representation more possible for those seeking disability benefits, since there is no immediate financial burden. It does away with upfront charges during a financially difficult time.
Additional Expenses and Costs Attorneys May Charge
Whereas most disability attorneys work on a contingency fee basis, there might be extra costs related to your claim. These are generally not part of the attorney’s contingency fee. They might include things such as:
- Court filing costs
- Fees for expert witnesses, if applicable
- Fees for acquiring medical records
- Depositions
- Travel expenses
- Copying and postage costs
Your attorney should notify you about any additional fees before you incur them. Once you win your case, these costs will often be taken from your settlement amount. However, being clear upfront on these fees with your lawyer is crucial.
Who Will Pay the LTD Attorney’s Fees
You may successfully have your insurer pay your lawyer's fees if your employer pays for your LTD policy. That is because, for employer plans, they are regulated under a federal statute called ERISA. If you pay for an individual plan, you may have to pay the attorney's fee yourself.
How ERISA (Employee Retirement Income Security Act)
ERISA governs most group LTD plans. Under this law, an attorney’s fees award is possible if you were denied LTD benefits and prevail against the insurer in court. The law has a provision that federal courts can direct your insurance provider to pay your lawyer's fees. However, the attorney's fees award is generally at the judge's discretion and is not automatic. LTD insurers will not pay for the lawyer’s charges unless the judge particularly directs that they do so.
Before, ERISA allowed an attorney’s fee award in cases where the claimant is the prevailing party. However, in a 2010 case, the Supreme Court clarified that you need not necessarily be the winning party in an LTD claim to recover lawyer's fees. Instead, you must prove some extent of success on the merits, a standard that has not been consistently applied since the court’s ruling. Still, many courts look at five elements when deciding whether or not to grant attorney's fees. These include the following:
- The merits of the parties’ positions
- Whether the attorney's fees award will discourage other parties from committing the same conduct
- Whether the defendant acted in bad faith
- Whether the person requesting attorney’s fees obtained benefits for the other plan members via the litigation
- Whether the defendant is capable of paying the attorney’s fees award.
Whereas the reasoning behind the court’s decision technically permits insurance companies to seek lawyer’s fee from claimants, insurance companies rarely pursue this move, and if pursued, courts rarely grant it. Should a judge grant you lawyer's fees, the award will not cover the time the lawyer spent on appeals with the insurer, just the hours they spent litigating within the federal appellate and district courts.
Individual Long-Term Disability Plans
If you have an individual long-term disability plan or a group plan not covered under ERISA, you are regulated under the American Rule. This rule provides that every party must pay for its own lawyer. Courts seldom set aside this rule unless there are extraordinary circumstances.
You Can Negotiate Your LTD Attorney's Fee
Before you agree to the contingency fee basis arrangement for your LTD claim, ensure you clearly understand the precise portion of your recovery amount your lawyer will receive. Note that there may be room for negotiations. If your lawyer offers to work on your case in exchange for 40 percent payment, you can make a counteroffer.
For example, you can offer them 25 percent of the payment. If you cannot settle on the charge, you can contact another law firm and compare the costs. However, remember you will generally receive the services you paid for. Retaining an inexpensive lawyer without experience could have its effects.
If your case is settled and you recover a one-time lump-sum payment for future and past LTD benefits, it is easy to establish your attorney's fee.
But imagine a situation where your insurer grants you monthly long-term disability benefits rather than a single lump-sum payment. What will happen? Will your attorney receive a part of only your past-due benefits, or will they also receive the monthly benefits? Will you be paying the attorney a sizable percentage of your monthly payment for the period you receive your benefits? You want to think carefully before you agree to pay your attorney any percentage of your future benefits, since it could cost you a lot.
What If You Do Not Win Your LTD Claim?
Another prevalent concern claimants have is what would happen if they lost their LTD case. Fortunately, since disability attorneys are paid on a contingency fee arrangement, you generally will not owe your lawyer any fees if you lose your case. The contingent fee basis gives claimants security since it removes the financial risks of retaining an attorney.
However, you might still be liable for any extra costs, like medical record costs, that came about during your case, even though you do not win. You want to discuss this possibility with your attorney at your first consultation.
Is Retaining an LTD Attorney Worth It?
After knowing the amount of money it will cost for an LTD to take on your claim, you may wonder whether it is worth proceeding with the hiring. The truth is, retaining an attorney significantly raises your odds of prevailing in your LTD case. According to studies, claimants with attorney representation have a higher chance of recovering benefits than claimants without legal assistance.
Attorneys have experience and may help you in various ways, including
Preparing Your Claim and Filing for a Suit
One stipulation that often catches claimants off guard is that you are typically forbidden from introducing new evidence when bringing a suit against your insurance company. With a few exceptions, the judge rules on your case depending on what is in your file with the intended insurer.
A skilled ERISA attorney will ensure your file is stacked with compelling evidence, like vocational, medical, and other relevant information, before your period of internal appeals is over (you have completed your appeal within your insurance company).
The lawyer will ensure your file contains all relevant medical evidence. They will work closely with your doctors to acquire supportive opinions regarding your job-related limitations. Knowing what questions to ask your physicians, instead of depending on the frequently biased paperwork your insurer provides, can be among your lawyer's most invaluable contributions.
Hiring Your Vocational Expert
Based on whether you possess any occupation or own an occupation disability policy, your lawyer might hire a vocational professional to testify regarding your position’s requirements or the general labor market. Relying on testimonies of allegedly independent vocational experts retained by your long-term disability carrier is not usually a good idea.
Legal Representation
Apart from obtaining convincing evidence about your disability, your lawyer can also talk to the plan administrator or LTD carrier for you, file your claim and appeals promptly, negotiate on the settlement, and bring a suit in federal court if need be.
All these steps can make the difference between the court denying and approving your claim. In addition, an attorney may assist you in securing a larger payout by ensuring the insurer considers all the benefits you are entitled to. These benefits cover more than the cost of retaining them.
It is never too early to retain a lawyer to help you obtain your LTD benefits. Soon after you become incapable of working, call an LTD lawyer to discuss your next steps. A lawyer will generally conduct a consultation and case evaluation in person or over the phone, so you have nothing to lose.
Note that even if you succeed in your long-term disability claim, you may still require an attorney. This is particularly true if your insurance policy provides that you must apply for SSD (Social Security disability) as a requirement of receiving long-term disability benefits. This usually means you must attend an SSD hearing at a particular point. If you are later awarded SSD benefits, many insurance companies require that you pay back all the benefits awarded to you under the long-term disability policy.
SSD runs under different rules than LTD insurance. There is no guarantee that, since you prevailed in your long-term disability claim, you will be eligible for SSD benefits. However, having a favorable long-term disability outcome can strengthen your SSD case, since it means the insurance company agrees you cannot do your usual job or any other job—two essential factors in SSD determinations.
Is Your Long-Term Disability Lawyer's Fee Excessive
Lawyers are at times unpaid under a contingent fee basis. However, other times an attorney will handle a case for just a few hours and earn thousands of dollars per the fee arrangement. Many clients see this as unjust, and attorneys themselves assert how ethical it is. Several state bar associations forbid attorneys from charging clearly excessive fees. Attorneys can also not charge fees unassociated with the quantity of work done, even if it is on a contingency agreement.
If you think your lawyer's fee is extremely disproportionate to their work, first discuss it with your attorney. Some attorneys will lower the fee themselves, while others will not. To raise a legal complaint regarding excessive lawyers' fees, consult the California Bar Association. Many claimants wait until their claim is initially denied to hire a lawyer. However, hiring one to assist with your initial application can safeguard your interests.
Find an Experienced Long-Term Disability Attorney Near Me
If you are still unsure about retaining a disability attorney because of what they may charge, you want to understand that many attorneys offer complimentary consultations. At this consultation, an attorney will assess your case facts and provide information regarding their payment structure and possible costs. This will allow you to raise concerns, ask you questions and understand better the amount it may cost without committing up front.
At Leland Law, we know the intricacies of LTD claims and are devoted to assisting you in navigating the process flawlessly. We have several years of experience representing claimants like you and understand what we must do to raise your odds of success. We are here for you if you are anywhere in California and your LTD has been wrongfully denied. Call us today at 866-449-6476 for a cost-free consultation to discuss your case and learn how we can assist you in securing your benefits.
