Contract Litigation Insurance Reduce the risk of loser pays exposure in a lawsuit. INSERT AGENCY LOGO HERE. Agenda . What is the risk? Contract Litigation Insurance Scenario example Benefits How does it work? Application process. The Facts: A Real Risk.
Contract Litigation InsuranceReduce the risk of loser pays exposure in a lawsuit
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66% OF DEFENDANTS LOSE THEIR CONTRACT CASES AT TRIAL
33% OF PLAINTIFFS LOSE THEIR CONTRACT CASES AT TRIAL
- Bureau of Justice Statistics
What is a prevailing party provision?
It is a clause in a contract that says if there is a dispute between the parties the loser pays the winner’s attorneys’ fees. Prevailing party provisions are also called:
EXAMPLE: “In the event that a dispute arises with respect to this Agreement or any of the terms or provisions thereof, the party prevailing in such dispute shall be entitled to recover from the other party its costs, including reasonable attorneys’ fees and expenses, incurred in ascertaining such party’s rights under this Agreement, whether or not it was necessary for such party to institute suit.”
What is the risk from state statutes?
Certain state statues require that the winner in a contract dispute can recover their attorney’s fees from the loser - - Even without a prevailing party provision in a contract
Prevailing Party Provisions exist in many types of contracts and can influence the course of litigation. Some examples include:
Because the majority of contracts contain a prevailing party provision, to the extent you are involved in a lawsuit, you are likely exposed to the risk of paying your adversary’s attorneys’ fees
Business A enters into a contract with [Your Company] to provide manufacturing services.
The contract states:
The contract has a prevailing party provision:
If [Your Company] wins the lawsuit, Business A will have to pay [Your Company] $120,000 to cover your attorneys fees – pursuant to the prevailing party provision in the contract.
If Business Awins the lawsuit, [Your Company] will have to pay Business A$400,000 to cover their attorneys fees – pursuant to the prevailing party provision in the contract.
PEACE OF MIND!
What does the policy cover?
When can a litigant apply for coverage?
How long does the coverage last?
How is a policy triggered?
What is not covered?
90 % OF LAWYERS SAID THEY WOULD ADVISE CLIENTS OF INSURANCE THAT CAN MINIMIZE THEIR FINANCIAL RISK IN LITIGATION
- INSTITE Research, April 30 – May 2009
- Complete a simple, one page application
- Provide a copy of underlying contract containing prevailing party
- File-stamped copy of complaint
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