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    Litigation and Long-Term Disability

    Litigation and Long-Term Disability

    In our 25 years as an experienced long-term disability law firm, we have clearly seen that insurance companies do not want to approve long-term disability claims. Fortunately, all claimants have the right to file an administrative appeal if their insurer denies their initial claim. But what happens if the insurance company denies the appeal? Long-term disability litigation may be necessary.

    Filing a lawsuit for long-term disability benefits can be a challenging and time-consuming process.

    In this article, Chisholm Chisholm & Kilpatrick (CCK Law) will explain:

    • What long-term disability litigation is
    • How ERISA can affect a lawsuit
    • What costs are associated with an LTD lawsuit
    • And more
    Who Are We: Chisholm Chisholm & Kilpatrick is a leading public interest law firm based in Providence, Rhode Island. Since 1999, we’ve helped hundreds of long-term disability claimants get the benefits they needed.

    What Is the Litigation Stage of the LTD Claim Process?

    Litigation is the third of the three potential stages in the LTD claim process:

    1. The Initial Claim
    2. The Administrative Appeal
    3. Litigation

    However, when a claimant proceeds to the litigation stage will depend on what law governs their claim.

    • State Law: If a person has an individual policy, and state law governs their claim, then they may be able to bypass the appeal stage and directly file a lawsuit after their initial claim receives a denial.
    • ERISA: If a person has a group policy that ERISA governs, then this is not an option. Instead, they must exhaust all required administrative appeals before litigating.

    In short, litigation is when a claimant files a lawsuit against their insurer to obtain their disability benefits. Many lawsuits do not make it to judgment. Insurers often settle by offering claimants a lump-sum settlement, though claimants don’t have to accept.

    Why Would an LTD Claim Head to Litigation?

    Typically, when an insurance company denies a long-term disability claim, the claimant files an appeal. However, an insurance company may also deny the appeal. In these situations, the claimant can decide to file a lawsuit.

    Some common reasons that an insurance company might deny a long-term disability appeal include:

    This list is not exhaustive. Read our article on why insurance companies deny LTD claims for more information on how these companies can use these reasons against your claim.

    Litigation: What Happens When Filing a Long-Term Disability Claim in Court

    Nonetheless, if an insurance company denies an appeal, the claimant has the right to file a lawsuit to try to obtain their benefits.

    Does ERISA Affect a Long-Term Disability Lawsuit?

    ERISA, or “The Employee Retirement Income Security Act of 1974,” is a federal law that governs most employee benefits plans, including employer-provided long-term disability insurance.

    When people think of litigation, they often think of a judge and a jury. However, when a claim under an ERISA-governed policy goes to court, it typically does not look like what most people expect.

    Some of the ways ERISA litigation looks different include:

    • The case is filed in federal court: Because ERISA is a federal law, related litigation must be held in the federal district court that has jurisdiction.
    • There is no jury: A judge alone will hear your case and make a final decision regarding your benefits.
    • The judge may give deference to the insurance company: Many ERISA-governed claims adhere to this standard of review in court, though not all. Under this standard (i.e., the “arbitrary and capricious” standard), the judge does not have to decide whether the insurer was right or wrong in its decision to deny benefits. Instead, the judge must determine whether the insurance company had a reasonable basis for issuing the denial, which can be a much more difficult standard to overcome.
    • You may not submit evidence during litigation: Usually, under ERISA, you may not submit any new or updated evidence during litigation. It is important to submit as much relevant and supporting evidence as possible during your administrative appeal, as this is the evidence the court will review.
    • You may only fight for your benefits: Typically, if you are successful in litigation, your recovery is limited to the LTD benefits owed to you and, potentially, interest and attorneys’ fees.

    If the judge rules against you, then you will not receive benefits. Of course, some claimants may decide to appeal the district court level ruling to the court of appeals.

    How to Avoid a Long-Term Disability Lawsuit

    What Are Some Possible LTD Litigation Outcomes?

    There are two possible outcomes of an LTD lawsuit:

    • The claimant and the insurance company can reach a settlement that avoids further litigation
    • They can go to judgment, and the judge will render a decision

    At any point during the litigation process, the insurance company may offer a lump-sum settlement to avoid further litigation.

    When faced with litigation, insurers often conduct a cost/benefit analysis of the situation to determine the best course of action. Additionally, litigation can be costly and lengthy, so it is sometimes in the claimant’s best interest to settle.

    However, many cases also do not settle. In these cases, the claimant must go through the complete litigation process.

    There are several different ways a judge may rule on a long-term disability case:

    1. They may grant all benefits and damages (if available) sought by the claimant
    2. They may grant some benefits and damages (if available) sought by the claimant
    3. They may remand (i.e., send the claim back) to the claim administrator, who must then conduct more reviews of the claim and make another decision
    4. They may deny the claim entirely.

    How Much Does It Cost to Litigate an LTD Claim?

    As with all litigation, there will be costs. One of the primary litigation costs for LTD claims is attorney fees. The long-term disability insurance attorneys at CCK Law want to alleviate the stress that comes with the long-term disability process so that claimants can focus on their health.

    Often, CCK Law utilizes a “contingency fee” payment structure:

    • Our attorneys receive a predetermined percentage of the benefits awarded should we win the case.
    • Contingency fee plans do not require the claimant to pay money up front.
    • The client will only owe money if we recover money for them.

    However, the payment structure can vary from case to case. Regardless, in every case, there is an agreement that the client will sign that clearly outlines fees and other terms of representation.

    Examples of other litigation expenses include:

    • Court filing fees
    • Process server fees
    • Postage
    • Other litigation fees

    We often advance these case expenses when working on a contingency fee basis. This ensures that claimants don’t have to pay out of pocket. The client simply reimburses CCK Law out of their share of the money recovered.

    Frequently Asked Questions

    Are State-Governed Claims Handled Differently?

    State law typically governs individual policies, but some group policies, like government and church policies, may be governed by state law.

    Litigation under state law is handled differently from ERISA-governed claims:

    • Under state law, you are entitled to have a jury hear your case
    • You may submit new evidence during litigation
    • You may be able to file a lawsuit without appealing first

    “Generally, for ERISA-governed claims, your case is going to be limited to the administrative record,” says Leah Small, a Partner at CCK Law. She continues: “And claimants usually cannot submit new evidence in court. Alternatively, for state-law governed claims, you have the more traditional opportunities for discovery and presenting new evidence in court.”

    What Are the Deadlines for Filing a Long-Term Disability Lawsuit?

    All claimants should thoroughly read their policies. Insurance policies will outline all deadlines for the entire long-term disability claim process, often including litigation. Thus, the deadline to file a lawsuit will vary based on a person’s specific insurance policy and by state law.

    Claimant Deadlines for Long-Term Disability Claims and Appeals

    If a claimant wishes to file a lawsuit against their insurer but does not adhere to the filing deadline within their policy, then the lawsuit may be rejected by the court as “untimely.”

    Under ERISA, the appeal denial must give a deadline for filing a lawsuit. Moreover, it is important to obtain a complete copy of the insurance policy and discuss it with an LTD attorney who can best advise them on the steps to take.

    How Long Can LTD Litigation Last?

    There is no deadline by which a long-term disability lawsuit must be resolved. The length of a lawsuit depends on several factors. These factors can include:

    • What insurance company is being sued
    • The scheduling order was issued
    • Discovery disputes
    • Mediator availability
    • Whether a settlement is reached
    • The court’s caseload

    As such, an LTD case can be resolved in a few months or potentially drag out for years. This is part of the reason that many insurers try to settle early in the process.

    Can I Submit New Evidence During Litigation?

    If you have an ERISA-governed claim, then typically you cannot submit new evidence. Administrative Appeal is your main chance to strengthen the record with additional medical and vocational evidence.

    Do I Need an Attorney for Long-Term Disability Litigation?

    It is recommended. Disability litigation is highly complex, especially under ERISA. An attorney is beneficial because they can interpret your policy, build convincing arguments, and make sure all deadlines are met. Without skilled legal representation, you risk losing benefits due to technical mistakes or not fully understanding how disability law works.

    How Important Is My Medical Evidence at this Stage?

    Medical evidence is crucial in litigation because it shows how your condition limits your ability to work. Since new evidence usually can’t be added, the records already submitted—like doctor statements, test results, and functional evaluations—carry the most weight. Strong documentation greatly improves your chances of overturning the insurer’s denial.

    Can I Sue My Insurance Company for Bad Faith in an ERISA Case?

    Unfortunately, ERISA law does not allow you to bring bad faith or punitive damage claims like you might under some state laws. In ERISA litigation, you can usually only seek the benefits you are owed, possible back pay, and attorney’s fees. This makes building a thorough appeal record essential.

    Need Help? Call CCK Law Today

    The long-term disability litigation stage can be overwhelming, but it isn’t something you must handle on your own.

    CCK Law has:

    • Over 25 years of experience
    • Helped claimants at all stages of the process—claims, appeals, and litigation
    • Fought against all major insurance companies in the United States

    Contact Us

    • Call (800) 544-9144 for a free case evaluation
    • Fill out an online form
    • Our team will review your case and determine how we can help.