Legal & Jurisdiction
Common Fund Doctrine
The common fund doctrine requires an insurer to share in the legal costs of a recovery it benefits from, reducing its subrogation reimbursement by a proportionate share of attorney's fees.
When the insured's attorney secures a recovery that also satisfies the insurer's subrogation interest, the common fund doctrine generally makes the insurer contribute to the fees that produced it. Its application varies by state and can be modified by plan or policy language.