Jul 16, 2010
Insurer Hit With Fees for Balking at Defense of Mercury-Contaminated Day Care Center
A liability carrier that lost its bid to refuse to defend claims over a mercury-contaminated day care center must pay its insureds $208,000 in legal fees, a federal judge ruled. The award reflects a 35 percent enhancement on a $153,750 lodestar, based largely on the risk that the insureds’ lawyer, who took the coverage case on a contingency basis, would not get paid. The case was risky because the carrier had a reasonable basis to refuse coverage in light of the novel legal issues raised, the judge said.