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Special Committee on Medical Lien Resolution

The Special Committee on Medical Lien Resolution was appointed in February 2010 and given the following charge: The Special Committee on Medical Lien Resolution is charged with studying the issue of outsourcing medical lien resolution services in personal injury cases to make recommendations to the Board of Governors on how best to provide guidance to lawyers on this issue, including any recommending any amendments to the Rules Regulating The Florida Bar that may be necessary to address this issue.

The Special Committee recommended that new subdivision (f)(4)(E) and commentary be added to Rule 4-1.5 to address the issue of charging separate fees for lien resolution, as follows:

(E) The lawyer shall include in the contract an explanation of the scope of any subrogation or lien resolution services the lawyer will undertake at the conclusion of the primary matter. The lawyer shall not charge additional fees for handling lien resolution services if those additional fees, when combined with the lawyer’s fees for handling the primary claim, would exceed the contingent fee schedule set forth in this subdivision. If extraordinary subrogation or lien resolution services are handled by others outside the primary lawyer’s firm who will charge additional attorney’s fees or costs to the client, these services shall only be provided after obtaining the client’s informed written consent to the additional fees or costs. Any additional fees or costs charged by the other lawyer involved in the subrogation or lien resolution services must separately comply with the provisions of subdivisions (a) through (e) of this rule, and if the fees are contingent on the outcome of the lien resolution, the lien or subrogation resolution fees on their own must also comply with subdivision (f) of this rule. The lawyer representing the client solely in the extraordinary subrogation or lien resolution services shall not divide fees for those services with the lawyer representing the client in the primary matter.

Comment

Rule 4-1.5(f)(4)(E) addresses the resolution of medical liens and subrogation claims that are directly related to the underlying personal injury or wrongful death case in which the lawyer represents a client. This subdivision requires that the lawyer undertaking the personal injury or wrongful death case set forth in the lawyer’s fee contract with the client whether the lawyer will undertake the resolution of any medical liens or subrogation claims related to the personal injury or wrongful death case as part of the lawyer’s services in that case. Extraordinary subrogation or lien resolution services are those that are beyond simple negotiation by the original lawyer. As part of every personal injury and wrongful death case, the lawyer handling the matter has an obligation under his contingent fee contract to make reasonable efforts to ascertain the existence of any medical liens and subrogation claims, advise the client of their existence, make reasonable efforts to negotiate liens that are negotiable, and disburse the amounts to lien holders and subrogation claimants as agreed by both the client and the third party and under the trust accounting rules set forth in chapter 5 of these rules. A lawyer is not obligated to file or defend a separate lawsuit to resolve medical liens or subrogation claims as part of the lawyer’s original agreement to represent the client in the personal injury or wrongful death matter, unless the lawyer makes a specific agreement to do so. Additionally, some liens or claims are so complex that they cannot be resolved through standard negotiation that is normally undertaken by the lawyer handling the personal injury or wrongful death case. In such cases, the client’s best interests may best be served by having the lien and/or subrogation matters resolved by another with significant experience in this field. Therefore, a lawyer may indicate in the lawyer’s initial fee contract that the lawyer will not undertake any resolution of medical liens or subrogation claims beyond the identification, negotiation, and disbursement described above. In such circumstances, or when reasonable efforts to negotiate such liens or claims fail, the lawyer may, with the client’s informed consent, either refer the client to a third party or hire a third party on behalf of the client to handle the medical lien and/or subrogation claim resolution who may charge an additional fee or cost to the client. If a lawyer provides the additional services, that lawyer’s contract with the client must separately comply with all provisions of rule 4-1.5. The original lawyer handling the personal injury matter should not make an agreement to divide fees with the third party to whom the lawyer refers the additional lien and/or subrogation resolution services, as the division of fees would result in an excessive fee to the original lawyer and would likely exceed the contingent fee schedule. If the additional services are to be provided by another, the lawyer should first determine whether the services constitute the practice of law and, if so, should not refer those services to a nonlawyer or someone not authorized to provide the services. A lawyer’s duties when a third party claims an interest in funds held by the lawyer are addressed in subdivision (f) and the comment of rule 5-1.1.

In a wrongful death case, often an estate must be opened to appoint a personal representative who will act on behalf of the estate of the decedent. In personal injury cases in which minors are involved, or in which a person is under a disability and cannot adequately act on his or her own behalf, often a guardianship must be established. The probate and guardianship matters are separate legal matters in which a separate reasonable fee may be charged. The probate and guardianship matters are not considered part of the personal injury or wrongful death matter for which the lawyer is subject to the contingent fee schedule set forth in this rule. Likewise, ancillary services such as estate planning, bankruptcy, financial planning, public benefit planning, tax planning, real estate transactions, and medicare set-asides are not considered part of the personal injury or wrongful death matter for which the lawyer is subject to the contingent fee schedule set forth in this rule. The personal injury lawyer should clearly indicate in the lawyer's contract that the lawyer does not intend to undertake such ancillary services, if the lawyer does not intend to do so.

The proposed amendments to Rule 4-1.5(f)(4)(E) and comment were approved by The Florida Bar Board of Governors on July 23, 2010. The amendments were filed in the Biannual Rules Amendments package on October 15, 2010 in Case Number SC10-1967. For more information on the petition, please see the Rules Update page.

Jay Cohen, Chair

[Revised: 08-26-2011]