Many potential clients are concerned about the attorney’s fee they will have to pay when we successfully resolve their claim. Their concern is understandable, given that any fee would be taken out of their gross recovery. Most potential clients are under the impression that my attorney’s fees will lower their overall recovery. I try to assure them that if we recover, we are entitled to attorney’s fees from the insurance company. At the end of the day, my goal is to make my clients whole by returning them to the financial position they held before their loss occurred. So it is my duty, as an advocate, to aggressively pursue recovery of attorney’s fees. Fortunately, Texas case law allows a successful claimant to recover attorney’s fees. And yes, that even applies to a percentage-based fees.
In Great American Insurance Company v. North Austin Utility District No. 1, the Texas Supreme Court noted that:
Chapter 38.001 of the Texas Civil Practice and Remedies Code allows a party to recover reasonable attorneys’ fees for a valid claim on an oral or written contract, and is to be liberally construed.
After concluding that the insurer was liable for attorney’s fees, the Texas Supreme Court affirmed the jury’s decision that 33 1/3% of the policyholder’s recovery was a reasonable amount for attorney’s fees.
In affirming an award for an attorney’s contingency-based fee in a prompt payment lawsuit, the Texas Appellate Court in Mid-Century Insurance Company of Texas v. Barclay stated the following:
[W]e believe it is consistent with the statute’s purpose to pay a contingency fee, which may be greater than an hourly fee. The specter of large attorney’s fees serves as additional incentive to the insurance company to respond promptly and diligently to its insured’s claims.
So the answer to the question in the title is, yes, you can recover attorney’s fees from your insurance company in Texas. As a policyholder advocate, it is my duty to aggressively pursue recovery of attorney’s fees from the insurer so my clients can use their full benefits to restore their lives and possessions.
