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May 15, 2013
Board deals with lien and subrogation claims issues

Lawyers could hire special counsel to resolve lien and subrogation claims in extraordinary wrongful death and personal injury cases with client consent under a rule amendment presented to the Bar Board of Governors last month.

Margaret Mathews Rules Committee Chair Margaret Mathews said the amendment was in response to a recent Supreme Court opinion on the annual Bar rules package that addressed the issue. In that opinion, the court said that lawyers must handle lien and subrogation negotiations as part of their underlying contingency fee contract. It rejected a Bar request that would have required lawyers to indicate in their fee contracts whether the lawyer would handle lien resolution and, if not, would allow lawyers to hire others to handle lien resolution with client consent.

Mathews said the court’s action led to the reconstitution of a special committee that examined the issue, which in turn proposed an amendment to Rule 4-1.5(f)(4).

According to information provided to the board, the contingency fee lawyer would be required to handle normal lien issues. However, in complex cases involving ERISA and Medicare, as well as state and federal issues, the attorney would be allowed to contract with or hire another attorney to handle those claims “only when the referral/hiring is in the client’s best interests and with the client’s informed consent. The amendments require that any separate agreement to handle extraordinary lien resolution separately comply with all ethical requirements of the [contingency] fee rule. The amendments prohibit the lawyer handling the extraordinary lien resolution to divide fees with the original lawyer in the matter.”

Board member Andy Sasso asked why the amendment didn’t address broader areas, such as probate and guardian cases, which also have complex issues that might require experts. That was addressed in comments in the previous rule submission rejected by the court. But board member Jay Cohen, who chaired the special subcommittee, said the panel believed that it was better to focus initially on a narrow area in the revised amendments.

The issue will come back to the board for a vote at its May 31 meeting in Sarasota.

On another matter, Mathews said the rules committee considered a request from a Bar member to adopt the ABA model rule to allow screening to address conflict of interest issues when a lawyer changes law firms. But the committee decided to reject that proposal, she said, ending consideration of that matter.

[Revised: 11-22-2017]