Last Updated On: 8 January 2020

How to Approach Lien Claims in Personal Injury Cases

Finding proper medical care and negotiating lien claims for individuals who suffered personal injury can sometimes be thornier and more convoluted than settling the claims resulting from these incidents. Clients may not understand why they’re legally obligated to pay providers when they were the ones who were injured, or they may be confused by their need to repay their health insurance company after paying monthly premiums for years.

Done thoughtfully and correctly, however, lien claims don’t require the herculean efforts many attorneys fear. In fact, attorneys may hold more cards than they understand when leveraging deals with lien claims and fighting for their clients! The key to mastering the lien claim process is communication.

Attorneys’ Ethical and Fiduciary Responsibilities

First and foremost, however, it’s vital that attorneys understand their ethical and fiduciary obligations to their clients. The California State Bar stipulates that attorneys, as a function of their fiduciary obligation to a lien claimant, will be subject to discipline for failing to communicate with, and promptly pay, the lien claimant. Please make yourself familiar with the California State Bar Standing Committee on Professional Responsibility and Conduct Formal Opinion 2019-175, which examines numerous lien-related cases where attorneys violated their ethical responsibilities, as well as the ethical framework with which they should have been dealt.

Although there are a variety of lien types that may arise during personal injury cases, Contractual Liens, consisting of those against health insurance, individual medical providers or prior attorneys, are among the most common types of liens.

In California, under California Code section 3045.3, a contractual hospital lien requires written notice to the person or entity alleged to be liable to the injured person, along with other specific information before payment of any money to the injured person or their attorney is awarded.

Importantly, not all liens and claims are created equal. Because some are easier to negotiate than others, or even subject to caps, reductions, and other quirks. For this reason, many medical providers choose not to accept liens at all. It’s important to confirm that physicians work on lien before sending your client their way.

Keeping Clients & Providers in the Loop

As stated above, clear communication and checks for understanding from both your client and the physicians with whom they’ll be working is vital to successfully navigating this process:

  • You are responsible for ensuring your clients understand that they’re obligated to pay any outstanding account balances for care related to injuries they suffered in this incident, pursuant to agreements that they signed, or the contract language of your policy or plan.
  • At the beginning of the case, communicate with all providers and lien claimants that this is a third party case, liability may be disputed, the tenability of their bill may be a point raised by defendant, and the total amount paid may differ from what was originally quoted.
  • Request and review updated itemizations of all medical bills. Ask that unrelated charges and procedures be removed.
  • Keep your client and any providers working on lien aware of any developments as they occur. Providers are more likely to work with your client on significant reductions if they are kept abreast of the realities and details of your particular case.

Negotiate Claims Before Finalizing the Third Party Settlement

When your client is seriously contemplating accepting a settlement offer, calculate your client’s net earnings after costs and fees, as well as lien claimant payouts at their full and potentially reduced values. Offer your professional appraisal of what would be appropriate offers to settle lien claimants’ claims.

BEFORE finalizing the settlement, however, reach out to the lien claimants to notify them of the pending offer under consideration and to discuss how their claim fits into the potential agreement. Provide written breakdowns of proposed reductions with the knowledge that this will likely entail at least a few rounds of negotiation. This type of conciliation requires just as much time and attention as other essential pieces of this case, but if you’ve been thorough and communicative throughout, it should be far less daunting.

Need Help Finding the Best Providers to Help Your Clients?

You and your client already have enough on your plate without having to worry about finding doctors and specialists that work on liens. For that reason, Power Liens has your back. Since 2012 Power Liens has been connecting attorneys with physicians on liens, and we continue to grow based on the strength of the relationships we’ve nurtured between law firms and medical practices of all kinds all over California. Check out for our full directory of providers, or call us at 800-680-5526 for more information about how Power Liens can help empower you and your clients to get the help they need!