Arbitrators' Award of Attorney Fees Was 'Gross Error,' Court Rules

CHICAGO - An Illinois appellate court vacated a portion of an arbitration award granting attorneys' fees to a cedent, ruling that it violated the Illinois Insurance Code and constituted a gross error on the face of the award. Amerisure Mutual Insurance Co., et al. v. Global Reinsurance Corporation of America, No. 08-42242 (Ill. App., 1st Div.).

"[T]he instant case is an extraordinary one where the arbitrators awarded attorney fees based on a statute which clearly reserves the authority to award such fees to the courts," the Illinois Court of Appeals, 1st Division, concluded.

In 2001, Amerisure Mutual Insurance Co. and …