SRHS will have to pay its own legal fees, court rules

Singing River Health System lost its case in the 5th Circuit Court of Appeals against an insurance company that has been paying the hospital system’s legal fees in the court battle against its retirees.

SRHS has had multiple attorneys on the two-year case and racked up attorney fees in the neighborhood of $3.4 million, which the insurer paid. Chubb, the insurance company, was arguing that there was a $1 million limit to what it actually owed.

“While U.S. District Judge Louis Guirola Jr. had originally ruled in our favor with respect to the insurance dispute, the appeals court disagreed and rendered an opinion favorable to the insurer,” said Georgia Storey, director of community relations with the county hospital system. “Essentially, their opinion overturns Judge Guirola’s finding that Chubb was required to provide all defense costs in excess of our $1 million policy.”

The court’s ruling is not clear regarding claims already paid, she said.

She explains it this way: “The 5th Circuit Court of Appeals heard two cases regarding Singing River Health System. One case involves the pension class action settlement and whether or not the settlement is fair, reasonable, and adequate as determined by Judge Guirola. The other involves an insurance dispute we have with our insurance carrier, Chubb, relative to the payment of our defense costs in the pension matter.

“The 5th Circuit ruled on the insurance case this week and we are expecting a ruling on the pension case any day now.

“We have not yet decided if we will appeal this ruling,” she said.

“While this case is related to the pension matter, the insurance case and the pension settlement are two separate issues before the 5th Circuit. As such, this insurance ruling should have no bearing on the Court’s decision on the pension matter or our ability to comply with the terms of the settlement should it be approved by the court.”

This story was originally published March 6, 2017 at 4:27 PM with the headline "SRHS will have to pay its own legal fees, court rules."