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Precedent Established for Interest on Delayed Benefits

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“Alice” was an accountant at a major accounting firm. As a result of the debilitating symptoms of Chronic Fatigue Syndrome, she was forced to apply for disability benefits. For almost five years, the insurance company continued to turn down Alice’s appeals, which she handled herself.

columns of justice over blue sky.jpegDiscouraged and frustrated, Alice came to Riemer & Associates. We decided to file one more appeal on Alice’s behalf. Finally, the insurance company agreed to pay her benefits-but it was five years too late because Alice already had lost her home and savings. Given the length of time it took the insurance company to pay Alice’s benefit, the Firm demanded that it at least pay interest on the delayed benefits. The insurance company refused.

The Firm commenced a class action in Federal Court, asserting that the insurance company owed interest to all claimants who were paid benefits in an untimely manner. Although the Court ultimately ruled that the case could only proceed on an individual basis and not as a class action, the lawsuit established an important legal precedent. An insurer that pays interest in an untimely manner is now liable for interest if it caused the delay. Alice was thrilled with the outcome. In a short note, she wrote:

Thank you for representing me. Thank you for standing for the people who are too sick to make a claim stand. When I think of David & Goliath, I think of you as the same. Many blessings to you and your lovely family.

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