I am sometimes asked by potential clients if they actually need a lawyer in their personal injury case? Most of the time the answer is "Yes," though sometimes (in very small cases) the answer might be "No," or "Maybe."
My office does not handle very small cases with very minor injuries, but we can refer you out to a promising younger lawyer who does; but even on a smaller case it can be important to retain a lawyer to handle your case. Statistically you get a higher settlement with a lawyer than without. Another reason you should consider retaining a smart and competent personal injury lawyer, however, is the issue of liens.
What is a lien? Simply put, a lien is an obligation to pay some outside third party or person money out of your settlement or judgment when the case has concluded. The issue of lien law has become very complex and convoluted. I often speak to colleagues who practice personal injury law and am surprised that even some lawyers are unaware of how certain lien issues work.
Lien issues are very dangerous and concerning, because if you fail to address a lien (even if you were not aware of one), you risk being sued, sometimes even in another state!
Liens can happen in many different ways. Let's take a simple example:
- I have a client who needs to see a doctor, but does not have health insurance or money to pay for the cost of that treatment.
- Because I know many doctors in California who know I will fight to get their bill paid, and that I want the best for my clients, they will treat the injured person on a lien (meaning simply they will provide treatment now, but will wait until the conclusion of the personal injury case before getting paid).
- The signed lien then obligates my office to pay the doctor in full before disbursing any money to my client.
- If the case does not work out, the client still remains responsible for payment of the doctor's bill (but fortunately this is very rare). I will call this type of lien a consensual lien.
More problematic than a consensual lien, are statutory liens or liens that arise as a matter of law. This is an area that is very complex, and most injured persons will not know how things work. You can try to settle your case on your own, and then find out later you were supposed to pay money to an outside lien-holder. You can be sued and be in a very difficult position. The unfortunate reality is that because liens are so complex, you probably need a lawyer just to make sure you do not fail to address a lien (there are also many other benefits of having a lawyer who knows what they are doing).
While not an exhaustive list, here are a few examples of liens that can arise in cases:
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Some or All Medical Bills Paid by a Governmental Entity
Medi-Care, Medi-Cal, CMSP, Healthy Families, and other programs connected to a state, county, or the Federal Government may have liens by operation of law. If they have paid any of your bills (or might in the future) you have to consider their interests, and they may have a lien on some or all of the proceeds of your personal injury case. -
Workers' Compensation
If workers' compensation has paid any of your medical bills, then the workers' comp insurance provider may have a lien (and/or can sue in their own name to recover) for any amounts paid out that are connected with your personal injury case (personal injury case is handled in civil court, workers' compensation is handled in the workers' compensation appeals board for your county). -
Automobile Med Pay
Many auto insurance policies have additional coverage called med pay coverage. It covers you and your passengers for any medical bills incurred (whether you are at-fault for an accident or not) up to the amount of coverage purchased, as long as the treatment is reasonable and related to the accident. Most companies demand repayment if you later settle your case with the wrongdoer, but not all of them do this. (Your attorney should know which companies want repayment and which do not.) -
Health Insurance
This is a really sticky area. Many of these plans are controlled by ERISA (a federal law). How they work depends on whether or not they are self-insured plans, the language contained in the summary plan document, the policy, etc. Because ERISA is a federal law, with a self-insured ERISA plan they can sue you in federal court if you fail to repay the health insurance out of a settlement or judgment; and they have nationwide jurisdiction, meaning they can sue you in another state. They will typically pick the state furthest from you and with the laws most friendly to their case. How do you know if the plan is self-insured or not? You don't, you need an attorney to tell you. How and when do you contact these entities? You contact them at the outset of the case.
Do I always have to repay a lien in a personal injury case?
No, there are circumstances where you do not always have to repay these lien-holders. The circumstances are so numerous and can turn on so many different factors that time prevents me from discussing the nuances.
Is there any good news?
Not really. Lien-holders and their right to recover (i.e. take money out of your personal injury settlement or verdict) are here to stay. Subrogation or right-to-reimbursement laws have been around for a while, and seem to be strengthening in favor of the insurance companies and against the injured victim. One silver lining is that with many of these lien scenarios (but not all) you can get a reduction in the repayment amount just because you have an attorney.
For example, if you have automobile med pay, and they have paid out $9,000.00 towards your medical bills, then the absolute most you should have to pay them back (with an attorney involved) is $6,000.00. This is called the common fund theory. In other words, if you have to pay your attorney between 33.3% and 40% of your settlement, then the insurance company has to reduce their repayment demand by that much, and probably also reduce pro rata their share your case costs.
Lien law has gotten so complex that there are several big law firms that practice nothing else. They advise other lawyers and injured people on when, if, and how much to repay a lien-holder; and the cost to pay these firms is in addition to the 33.3-40% contingency fee you pay your personal injury lawyer.
Do you need one of these specialty firms in your case? Probably not, but it depends on the case. If the case is big dollar, complex, lots of future medical needs with Medi-Care of other entities involved (or which may be involved in the future), then you might. At the Law Office of Adam Sorrells, much time and effort has been made to stay current on lien law. Most lien issues on Mr. Sorrells' cases are handled directly by his office, and there is no extra charge to negotiate your lien with the company demanding repayment. Some lawyers charge an extra fee for this service (and others hire an outside firm), but Mr. Sorrells does not charge an extra fee for this critical and complex service.
Unfortunately for many personal injury lawyers, being excellent in court, with medicine, with facts, and with negotiating is not enough these days. You must also know the intricacies of lien law that often will not raise its ugly head until after the case is settled.
If you have been injured and need an experienced attorney who cares about your case, please call us at 530-893-9900.