Why Do I Have to File a Lawsuit?

When an ERISA long-term disability appeal gets denied, the next step is, potentially, to file a lawsuit in federal district court. Some clients already know that they would like to settle their case and ask, why can’t we just negotiate a lump sum settlement with the insurance carrier? Why do I have to file a lawsuit? In short, while plaintiffs’ attorneys would likely be amenable to negotiating informally, insurers generally refuse to come to the table until a formal complaint has been filed. The weight of a formal lawsuit perhaps creates more real incentive and pressure for the insurer to settle, and the process is well established and well understood. Having already filed suit, one benefit of going through the court process for a plaintiff is that, in the event a settlement can’t be reached, there is the possibility of taking the case to trial within a shorter timeline –the complaint has already been filed, a judge has been assigned, and certain deadlines have already been put on the court calendar. The desirability of accepting a lump sum settlement varies from case to case.

What Does a Win at Trial Look Like?