7th Circuit Compels Arbitration of Attorneys’ Fees Claim Against Insurer

CHICAGO — A federal appeals court has compelled arbitration of whether an insurer is required by Illinois law to pay attorneys’ fees due to its alleged “vexatious and unreasonable” refusal to pay Hennessy Industries Inc.’s asbestos-related insurance claims under a cost-sharing agreement.

On Oct. 28, the 7th Circuit U.S. Court of Appeals found the issue falls squarely within the agreement’s arbitration clause and that Hennessey waived its right to litigate its Illinois Insurance Code claim.

Car parts manufacturer Hennessy Industries sought coverage from National Union Fire Insurance Company of Pittsburgh for asbestos-related personal injury claims. In 2008, Hennessy and National …