The process for allowing and recovering attorney’s fees for bad faith prosecution of a claim may differ from state to state. A recent Pennsylvania case Villani v. Seibert, is an example of just such a case. This attorney pursued a case against the defendant that was without merit. The defendant is seeking to recover fees.
Attorneys that pursue cases of questionable merit should be aware that their Lawyer Professional Liability Insurance policy likely will not provide coverage. Almost all attorney malpractice policies either have a specific exclusions or more likely in the definition of damages, a carve out provision that states that fees or sanctions are not covered.
Over the years we have had more than one law firm be surprised that there is no coverage for attorney fees. Many of the awards for attorney’s fees are in at least the 6 figures in not 7 figure range, which hurts even more without insurance coverage.