What is a lien? A lien is a legal interest or right to another person’s current or future property. Typically, a lien is valid until the underlying debt or obligation is satisfied. For a lien to be valid and effective, it must be recorded with the county recorder and the person whose property the lien is recorded against must be notified.
WHAT DO LIENS HAVE TO DO WITH MY INJURY CASE?
A doctor’s office, hospital, surgeon, or other healthcare entity who has not been paid in full, or who has not been paid at all, may file a lien against your potential settlement or judgment. By law, the lien money is taken and given to the hospital or surgeon once it gets to your attorney, without ever reaching your hands. If there is a dispute in regard to a lien amount, the money stays in an trust account until the matter is resolved.
A lot of what personal injury lawyers mesa az do involves negotiating such liens and reducing the amount owed pursuant to the lien. For every dollar a lien is reduced means an additional dollar in the injured person’s pocket. You may ask what incentive any health care provider has to reduce his/her lien from the full amount. Well, if your case happens to go to trial and you lose, the providers as well as you may not get any money at all. Settling a case is not only less risky for you, but it is also less risky for the medical providers to whom you owe money. Lien reductions assure money lands in your pocket and in the pocket or your medical providers.
WHAT IS THE LaBOMBARD CASE?
The idea of having a large lien filed against your settlement monies may be unsettling. With the attorney fee and medical liens it may start to feel that everyone is looking to take a piece of your pie leaving nothing left over for you. Rest assured that attorneys have working relationships with lien holders and that reducing a lien to a significantly smaller amount is common.
In the LaBombard case, a girl was riding in a jeep when the driver of the jeep lost control and the girl was ejected. The girl was injured and was treated. The hospital filed a lien against the young woman’s settlement that she of course did not want to pay. After a lengthy trial, the lien was upheld. However, the court used and created what is called the common fund doctrine, designed to protect injured parties who have liens filed against their settlement money or eventual judgment.
WHAT IS THE COMMON FUND DOCTRINE?
The common fund doctrine ensures fairness to a person entitled to a settlement or judgment, and who, due to outstanding medical liens and attorney fees, would receive little or no money at all. A person who employs a lawyer for the purpose of pursing a personal injury claim is employing them to preserve or obtain a “common fund”, common in the sense that multiple people and entities will benefit from the settlement. Since the injured party will be responsible to pay the bulk of the fees, the injured party may be entitled to have his or her attorney fees paid for with lien money instead of the balance of the funds after the liens are paid. This essentially means that more money is left in the pocket of the injured party.