Quinn Emanuel Urquhart & Sullivan was ordered to turn over an insurance policy it obtained on a $185 million legal fee, a federal judge ruled Tuesday, clearing the way for light to be shed on a relatively new area of litigation finance known as judgment preservation insurance.
The ruling came after Quinn Emanuel’s legal fee was overturned last year by an appeals court, which ordered a federal judge to recalculate the award. The fee represented 5% of the billions of dollars the law firm obtained for health insurers stiffed by Congress when it decided to not fund a portion of Obamacare.
A group of health insurers who objected to the fee had argued Quinn Emanuel must turn over the policy to ensure that they could receive payment of any funds if the court trimmed the nine-figure award.
The objectors had also sought a full accounting of the funds, which they said had already been disbursed to Quinn Emanuel partners. The judge ruled against that request, saying Quinn Emanuel was likely to repay any portion of the fee it may owe.
The court has yet to make a decision on whether the fee will be reduced.
Lawyers for Quinn Emanuel and the objectors did not immediately respond to requests for comment.
The policy at issue is known as judgment preservation insurance, or JPI. The policy is typically used by parties who are waiting to receive large legal awards and want to protect some portion of the award from being overturned on appeal.
“The JPI’s terms may be relevant to the court’s task on remand if the policy provisions are inconsistent with the court’s objective ‘to ensure an overall fee that is fair for counsel and equitable within the class,’” US District Judge Kathryn Davis wrote.
Insurance brokers have marketed the policies aggressively and say they are growing in popularity. Still, few details of such policies have ever been made public.
The objectors in the case were ordered to file a response to Quinn Emanuel’s latest motion to approve the fee request by March 5. That filing could include some details of the insurance pact.
The case is Health Republic Insurance Co. v. The United States, Fed. Cl., 16 259, 1/30/24.
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.