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Court of Chancery Finds Limit On Advancement Rights

Posted In Arbitration

Majkowski v. American Imaging Management Services LLC, C.A. No. 1797-N (Del. Ch. December 6, 2006).

The right to have attorneys fees paid in advance of the final result in litigation is illustrated by this recent decision. The Court held that an agreement to "hold harmless" does not give the right to advancement of legal fees. Instead, "hold harmless" language only confers the right to be indemnified at the end of the litigation.

This decision also has a good summary of the law dealing with when arbitration may be compelled. It notes that in some cases it is possible to avoid arbitration by not suing on the rights contained in the contract that has the arbitration clause, but instead filing an independent claim such as for breach of fiduciary duty. Share


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