If somebody brings an ERISA claim in court, there are typically two types of claims, sometimes three, that participants will bring. And the recovery that you can expect to receive depends on the nature of the case that you’re bringing. The most common type of ERISA case, and the one we most typically see from our clients, is a claim for benefits, where you are suing over the benefits that you think you’re entitled to and that aren’t being paid to you, whether that’s a retirement benefit that’s too low that you think should be higher, whether that’s a disability benefit that’s been terminated, or a life insurance benefit that hasn’t been paid. And so in those cases, your recovery is typically limited to the benefit you believe you’re owed, interest on the benefit that has been withheld from you for some period of time. And the interest rate is a matter of some debate. And then potentially attorney’s fees and costs. Unfortunately, what you can’t recover when you’re bringing a benefits claim is punitive damages, pain and suffering, anything like that under ERISA. There is a second type of claim, however, called a claim for equitable relief that typically arises from a breach of fiduciary duty. The people who decide ERISA benefit claims are fiduciaries, which means that they have a legal obligation to act in your best interest or the interest of all plan participants and not in their own financial interests.
Courts have recognized that those fiduciaries sometimes have a conflict of interest, in particular where they are both responsible for deciding the claim and paying the claim. This most typically occurs with insurance companies. If an insurer or other planned fiduciary has breached their fiduciary duty to you, then you may be able to obtain additional types of relief that sometimes look like the benefits you’re seeking but are qualitatively different under the law or other forms of relief. So a common example would be if you worked for a company and you contacted the benefits department, and you’re in your mid-60s, and you ask if you’re fully vested in your retirement benefit, and what will the amount of your benefit will be. And they tell you that you’re fully vested and that you’re going to get $2,000 a month for the rest of your life when you retire. And in reliance on that information, you choose to retire. You leave your job.
There’s no prospect of coming back. You submit your retirement paperwork, and oops, somebody made a mistake. Whether that mistake was intentional or unintentional oftentimes doesn’t matter if it was an equitable. And so under that scenario, while you might not be entitled to the underlying retirement benefit you seek, may be able to bring a claim for equitable relief for an amount equal to the retirement benefit you were promised because you acted in reliance on that representation. Those cases are difficult. They’re not particularly common, and your opportunities to bring them are somewhat limited. But we do see them, and we see them more and more these days. There was a Supreme Court decision about 10 years ago, 12 years ago now, called Amara. And Amara somewhat expanded and clarified the scope of equitable relief somebody can bring. The third type of ERISA claim, which is typically not brought on an individual basis, it’s most commonly brought in a class-wide basis, is a claim for breach of fiduciary duty, but you’re bringing it on behalf of the plan itself. So if you have a case where the fiduciary embezzled money from the retirement plan, for example, you, as a participant in the plan, can sue that fiduciary for doing it, but you can also sue on behalf of or for the damage done to the plan as a whole as a result of the fiduciary’s misconduct. And those claims are, as I said, less common, and they typically arise in relation to retirement benefits, but not always.