Tuesday, February 23, 2010
UNEMPLOYMENT INSURANCE - ATTORNEY FEES
A recent consultation revealed the following: Claimant was receiving benefits and the employer's objections were found not credible by the DOL. Employer requests a hearing. Claimant wants representation and is explained how attorneys fees work as per the Appeals Board rules. But then Claimant comes up with an interesting statement: "Why should I have to pay anything? My employer makes this worthless claim just to harass me and I have to pay a legal fee to defend myself? Why doesn't he pay my fees?" The answer can generally be found in Wikipedia which notes that "most countries operate under a "loser pays" system, sometimes called the English rule. Under the English rule, the losing party pays the successful party’s attorney fees (please note that the award is referred to as "attorney fee" as the fees do not belong to the attorney, but to the prevailing party), as well as other court costs. The United States is a notable exception, operating under the American rule, whereby each party bears its own legal expenses....A number of federal laws provide for an award of attorney fees for a prevailing plaintiff....Most states have statutes under which attorneys' fees may be awarded to a prevailing plaintiff, such as an action on a contract where the contract contains a provision allowing recovery, or an action brought under consumer protection laws. Both plaintiffs and defendants are sometimes awarded attorneys fees in divorce and child custody actions....A majority of states allow generally for an award to any party in a lawsuit, if another party has forced him to expend money on attorneys fees to defend against a claim utterly or substantially lacking any possible merit (frequently called "abusive litigation")". Unfortunately, in New York, the Unemployment Insurance Law does not have such a provision and I have not found a case where the "abusive litigation" rule has been applied to administrative hearings. I would be interested to hear if anyone else has.