{"id":892633,"date":"2017-07-26T15:16:11","date_gmt":"2017-07-26T21:16:11","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=892633"},"modified":"2017-07-26T15:16:11","modified_gmt":"2017-07-26T21:16:11","slug":"alternative-fee-arrangements-insurer-footing-bill","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/alternative-fee-arrangements-insurer-footing-bill\/","title":{"rendered":"Alternative Fee Arrangements When the Insurer Is Footing the Bill"},"content":{"rendered":"

Amanda Hairston | Farella Braun & Martel LLP<\/a> | July 21, 2017<\/p>\n

Clients regularly ask their counsel to propose alternative fee arrangements and they are growing in popularity. While these arrangements can be beneficial for clients, they should be carefully considered when an insurance company will be paying all or part of the defense fees. Insurers are typically averse to alternative fee arrangements; they are more comfortable with a straight hourly arrangement \u2013 after trying to impose rate caps and litigation guidelines of course. Carriers have ingrained methods of managing defense costs and negotiating bespoke alternative arrangements with individual insureds is not cost-effective or efficient for a claims adjuster dealing with dozens or even hundreds of cases. Accordingly, insureds may need to accept more traditional fee deals when retaining counsel that will ultimately be paid by the insurer.<\/span><\/p>\n

This does not mean that there is no room for creativity. As our readers know, there is typically a gap between the hourly rates that an insurer will pay and the rates charged by an insured\u2019s chosen counsel. Often, insureds are forced to choose between the insurer\u2019s panel counsel \u2014 who will accept the insurer\u2019s proposed hourly rates \u2014 and independent counsel \u2013 who will charge more. One solution is to ask independent counsel to agree to bill at the insurer\u2019s proposed rates, but add an incentive structure. This would allow independent counsel to recover from the client the difference between the insurer\u2019s proposed rates and counsel\u2019s hourly rates if the case has a \u201csuccessful outcome\u201d \u2013 as that term is defined by the insured and its counsel. Insurer consent to the alternative fee arrangement should be unnecessary because any incentive payment would be solely borne by the client. This type of arrangement can be a win-win-win, where the insurer pays only its proposed rates, the insured enjoys independent counsel paid for by insurance during the pendency of the action, and defense counsel can earn additional compensation by bringing home a win for the client. While options may be more limited when a carrier is footing the bill, it does not mean that clients should give up on alternative fee arrangements entirely.<\/p>\n","protected":false},"excerpt":{"rendered":"

Amanda Hairston | Farella Braun & Martel LLP | July 21, 2017 Clients regularly ask their counsel to propose alternative fee arrangements and they are growing in popularity. While these arrangements can be beneficial for clients, they should be carefully considered when an insurance company will be paying all or part of the defense fees.… Continue reading Alternative Fee Arrangements When the Insurer Is Footing the Bill<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[3],"tags":[9895,10228,528],"class_list":["post-892633","post","type-post","status-publish","format-standard","hentry","category-insurance-claims","tag-advise-consult","tag-alternative-fee-arangement","tag-attorney-fees","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nAlternative Fee Arrangements When the Insurer Is Footing the Bill - 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