If there are grounds to challenge a trial court’s decision in a civil case, an appellate attorney can argue that legal errors were made, warranting a reversal or modification of the lower court’s decision. Pending the appellate court’s review, an appeal bond is often required. Essentially, an appeal bond serves as a financial guarantee to the prevailing party (known as the appellee or respondent) that the party bringing the appeal (the appellant or petitioner) will satisfy the judgment if the appeal is unsuccessful.
Safeguarding Funds For The Judgment
An appeal bond, often referred to as a supersedeas bond (from the Latin “supersedeas,” meaning “you shall desist”), is a crucial financial instrument in the appellate process. Think of it as a safeguard for the party who won at the trial level. When a losing party decides to appeal a judgment, they’re essentially asking a higher court to pause or overturn the original decision. Without an appeal bond, the winning party (the appellee) could be left without recourse if the appealing party (the appellant) doesn’t have the funds to pay the judgment after a potentially lengthy and unsuccessful appeal. The bond ensures that if the appeal fails, the appellee will still be able to collect the money or property awarded to them by the trial court. Investopedia highlights these three key points about appeal bonds:
- Appeal bonds are usually required in civil cases involving monetary judgments. These typically include contract disputes, personal injury lawsuits, property disagreements, and business litigation. Other common cases requiring appeal bonds include employment law disputes, product liability claims, and intellectual property conflicts with monetary awards.
- Appeal bonds are financial guarantees required by courts to protect the winning party’s interests during the appeals process, typically covering the full judgment amount plus anticipated interest and costs. They allow the losing party to delay payment of a judgment while appealing, but ensure funds will be available if the appeal fails….
- The appeal bond also serves as a safety net bond, which helps protect the court from frivolous appeals or delaying tactics to avoid payment as these dishonest activities cost the court time and money….By posting an appeal bond, the defendant guarantees that the original judgment against them will be paid if they lose the appeal.
The Purpose of Appeal Bonds
In civil cases, it’s very common for courts to require a type of bond, known as an appeal bond. Sometimes referred to as a supersedeas bond, an appeal bond acts as a financial guarantee while the appellate court reviews the case. Investopedia explains three key points about appeal bonds:
- Appeal bonds are usually required in civil cases involving monetary judgments. These typically include contract disputes, personal injury lawsuits, property disagreements, and business litigation. Other common cases requiring appeal bonds include employment law disputes, product liability claims, and intellectual property conflicts with monetary awards.
- Appeal bonds are financial guarantees required by courts to protect the winning party’s interests during the appeals process, typically covering the full judgment amount plus anticipated interest and costs. They allow the losing party to delay payment of a judgment while appealing, but ensure funds will be available if the appeal fails….
- The appeal bond also serves as a safety net bond, which helps protect the court from frivolous appeals or delaying tactics to avoid payment as these dishonest activities cost the court time and money….By posting an appeal bond, the defendant guarantees that the original judgment against them will be paid if they lose the appeal.
How Appeal Bonds Work: Three Parties
Understanding an appeal bond requires recognizing the roles of the three distinct parties involved:
- The Principal (Appellant/Petitioner): This is the party who lost at the trial court level and is now filing the appeal. They are the ones required to obtain the appeal bond. Ultimately, they must reimburse the surety company if the surety has to pay out on the bond.
- The Obligee (Appellee/Respondent): This is the party who won the judgment in the trial court. They are the beneficiary of the appeal bond, since the bond ensures they can collect the judgment if the appeal is unsuccessful. Note that often, the court itself is considered the obligee, as it requires the bond.
- The Surety (Bond Company): The surety acts as a financial guarantor, backing the principal’s promise to pay the judgment if the appeal fails. They effectively “lend” their financial strength to the appellant.
When an appeal bond is ordered, the amount is usually set by the court, and typically covers the judgment amount, plus anticipated interest, court costs, and sometimes attorney fees that might accrue during the appeal. The appellant then applies to a surety company for the bond. The surety assesses the appellant’s financial stability and creditworthiness, typically requiring collateral from the appellant for protection, in the event the surety ultimately has to pay a claim. The appellant also pays a premium (a percentage of the bond amount) to the surety for issuing the bond. Once approved, the surety issues the bond, which is then filed with the court. This act “stays” or pauses the enforcement of the original judgment, allowing the appeal to proceed without the appellant being forced to pay immediately. Once the appellate court reviews the case, one of two resolutions typically occurs:
- If the appellant wins the appeal: The lower court’s decision is reversed or modified. The appeal bond is then released, and any collateral provided by the appellant is returned.
- If the appellant loses the appeal (judgment affirmed): The original judgment stands. If the appellant then fails to pay the judgment, the appellee can make a claim against the appeal bond. The surety company will investigate the claim and, if valid, pay the judgment amount (up to the bond’s limit) to the appellee. The surety then seeks reimbursement from the principal, using the collateral if necessary, as per their indemnity agreement.
Though intricate, appeal bonds ensure fairness, by allowing an appellant to pursue legal remedies, while simultaneously protecting the appellee from financial harm during the often-lengthy appellate process. When an appeal bond is ordered, it’s important to apply for and secure the bond quickly, via a reputable surety company that can meet the specific “obligee requirements” set in court. As a leading, direct and national court bond writer, Colonial Surety Company makes it easy and speedy for attorneys in every state to help clients secure appeal and other court bonds.
We meet specific court requirements, provide simple online applications, and make instant bond downloads available for prompt filing in court.
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