Liens and Seeking Lien Reductions – How Much of Your Injury Proceeds Will You Keep?

In personal injury cases, our clients are typically focused on how much a defendant is willing to pay in a settlement.  Most plaintiffs believe that attorneys’ fees and costs will be subtracted from the settlement, and that they will be entitled to the money that remains.

However, there often is one other consideration – the amount of money that must be re-paid in the form of statutory and contractual “liens.”  A medical lien is the right of a health care provider, doctor, hospital, or insurance company to assert an interest in personal injury recoveries of its patients, stemming from medical costs that have been incurred.  This is a critical factor that must be taken into account when a settlement is being considered.

How Liens Work in a Personal Injury Case

Suppose that an injured person has $100,000 in medical bills, and a defendant is willing to settle a case for $300,000.  The insurance company may have a lien for $100,000 against that settlement.  If the law firm is entitled to 33% of the proceeds of the settlement (or $100,000), then the injured client would receive $100,000 after accounting for both the attorneys’ fees and liens.

Our firm negotiates tenaciously with insurance companies and other statutory lien holders in seeking to get them to reduce the amount of their lien.  Often, statutory lien holders will agree to reduce their lien by a cetain percentage.

By working vigorously and seeking lien reductions, we are usually able to put more money into the pockets of our clients.