What Is a Lien in a Personal Injury Case – and How Does It Work in PA?
Thousands of people across Pennsylvania file personal injury cases every year in the hopes of recovering compensation for accident-related losses. Plaintiffs in personal injury cases look forward to the day they’ll receive their final settlement awards, but many are shocked to find their take-home compensation is far less than they anticipated.
These discrepancies are often the result of forgotten liens that must be repaid at the end of a personal injury case. Failing to adequately factor in these liens can cause major sticker shock on settlement day and leave some plaintiffs wondering whether they’ll have the resources they need to cover the full value of their losses. Here’s a quick primer in how liens work in Pennsylvania personal injury cases and an exploration of how an experienced attorney can help their clients mitigate the impact these liens might have on their personal injury settlement.
What is a lien in a personal injury case?
In the context of a personal injury case, a lien is a legal claim that allows a third party to seek reimbursement for expenses they paid on a plaintiff’s behalf. Liens are often necessary in personal injury cases because many accident victims do not have enough cash on hand to cover their immediate post-accident expenses, but can’t delay necessary treatment pending a determination of fault in their case.
Some payors, such as Medicare, Medicaid, or workers’ compensation, may have reimbursement rights, but private insurance reimbursement depends on the specific plan terms and Pennsylvania’s subrogation rules.
Who can place a lien on a settlement?
While most personal injury liens involve healthcare and related entities, there are actually several different parties who may be able to place a lien on a personal injury settlement. Some of these entities include:
- Private health insurance companies
- Medicare
- Medicaid
- Workers’ compensation insurance carriers
- Hospitals
- Auto insurers
Basically, if any insurer or similar entity foots the bill for your medical expenses, they may be entitled to reimbursement at the conclusion of your case. It’s important to keep track of any and all liens placed on your settlement so you can account for the value of these liens during negotiations.
If you don’t keep close tabs on these debts, you may find yourself walking away with far less compensation than you anticipated at the end of the process. Additionally, it’s important to keep track of which liens are in play so you can follow the necessary protocols for paying back your benefactors. An experienced personal injury lawyer can help you stay one step ahead of the repayment process and work with you to ensure you retain a large enough portion of your settlement to effectively cover your future needs.
How do liens get repaid in Pennsylvania?
As we mentioned above, specific repayment protocols and requirements tend to vary depending on the specific lienholder involved in your claim. This includes the lienholder and their attorney, as well as the alleged at-fault party and their attorney.
Notice requirements vary depending on the type of lien or reimbursement claim involved. Your attorney can help clarify the specific reporting requirements that may apply in your case. Most of the time, liens get repaid after a settlement has been paid but before the funds are made available to the plaintiff.
Some reimbursement claims may be reduced to account for attorneys’ fees. Reduction rules vary significantly by lien type to ensure plaintiffs don’t walk away owing more than they can actually afford. To further shore up your financial position, your attorney may also be able to negotiate with your lienholders to reduce your debt. These negotiations can prove vital for plaintiffs who relied heavily on liens to pay for their care or for plaintiffs who were unable to secure their desired settlement amount.
Can I negotiate my liens?
As noted above, a skilled personal injury attorney can help clients negotiate their liens in order to help them maximize the value of their settlement award. There are a few different avenues attorneys can pursue to help their clients negotiate with their lien holders. For example, they may argue for a reduction on the basis of financial hardship or argue that the plaintiff received less money than anticipated at the conclusion of their case.
They may also seek to enforce required reductions for fees and argue for additional concessions to help their clients keep more of their money. If the lienholder claims they’re entitled to more than what they actually paid out, an attorney can push back against these claims and provide evidence to counter these predatory arguments.
This is yet another reason why it’s always best to consult with an attorney as soon as possible after an accident. Early legal intervention can serve as a buffer against many unintended consequences of settlement liens and ensure you don’t agree to anything up front that may come back to bite you later on. The lien repayment process can get complicated and open plaintiffs up to a wide variety of legal challenges, so it’s best to put your faith in an experienced personal injury attorney who has your best interests at heart.
Final thoughts
Your settlement award is supposed to be your lifeline after an accident, but medical liens can seriously impact the amount of compensation you take home at the end of the day. With a little bit of forethought, you can maximize the value of your settlement award – even if you relied on medical liens to access the care you needed in the aftermath of your accident.
At Carmody and Ging, Injury & Accident Lawyers, we understand that medical liens are often a double-edged sword in personal injury cases. Yes, they can prove vital in helping accident victims access care and resources. But they can also leave claimants walking away with less compensation than they had hoped. That’s why we are committed to helping our clients advocate for themselves, negotiate with lienholders and secure the compensation they need to meet their post-accident needs.
If you’ve filed a personal injury claim in Pennsylvania and are concerned about how medical or other liens may impact your settlement, we’d be happy to speak with you about your options. Give us a call today or fill out our online contact form to schedule a free consultation with a member of our team, and let’s see what we can do to make sure you keep more of the compensation you need to move forward.