One of the most difficult scenarios we see as personal injury lawyers is an accident victim who seeks compensation in a personal injury case only to discover that a lien has been placed on their settlement. If this has happened to you, you are certainly not alone. It is unfortunately quite common for a doctor’s office, PIP or other insurance company, or worker’s compensation to insist that they are owed a part of your settlement. But most people don’t know this is part of New Jersey law.
Liens can have an enormous impact on your finances as well as your recovery, and if you are facing one, it is essential to know what to do next. Usually, the best way to handle a lien is by working with a Passaic County personal injury lawyer. At Bavagnoli & Bavagnoli, we are experienced in negotiating with insurers and other lien holders when your settlement is threatened. I will tell you more about how liens work and how to respond to one below.
What is a Lien?
It can be shocking to receive personal injury compensation only to discover that a third party has a right to collect some of what you have recovered. But in most cases where a victim files a lawsuit against the responsible party and wins, they legally owe a third party like an insurer or hospital part of their settlement.
The legal term for this is “subrogation.” Subrogation refers to another party’s right to collect from an injury settlement or award you receive in court. The purpose of subrogation rights is to prevent victims from “double-dipping,” or profiting from their injuries by receiving compensation for the same expense from two parties. While it is perfectly legal for a victim to be compensated for any losses they incur because of their injuries, it is not legal for them to profit from those injuries.
There are several different types of liens. Medical liens can be imposed by anyone who has paid for a victim’s medical treatment, including insurance companies, hospitals, worker’s compensation, and government agencies. At Bavagnoli & Bavagnoli, we see these cases commonly. Insurance companies in particular often seek subrogation to recover medical expenses they paid on behalf of the injured party.
As an example, let’s say you got in a car accident that was someone else’s fault, and used your insurance coverage to pay for healthcare afterwards. If your injuries are serious and you also file a lawsuit against the at-fault driver and receive a settlement from them that also includes payment for your healthcare, your insurance company could file a medical lien requiring you to pay them part of your settlement.
Likewise, let’s say worker’s compensation paid for your medical treatment, and you also file a claim against the at-fault party. In this case, the worker’s compensation provider could file a lien against proceeds from your personal injury award. In the case that you file a claim against someone other than your employer, a worker’s compensation lien will be automatic, so you can expect it.
In some cases, if an accident victim does not have sufficient PIP insurance coverage, or has no insurance coverage at all, any medical care the hospital delivers that they are not paid for may result in a lien. Depending on the type of health insurance coverage you have, however, the provider may or may not be entitled to reimbursement. As you can see, this is quite complicated, so it is best to work with an attorney to sort it out.
Unfortunately, New Jersey laws are both confusing and ever-changing, which means most people are not even aware that a lien can happen, much less prepared to handle it. This is why it is best to know about any possible lienholders before you settle your injury claim. The first place to look for this is within any insurance policies you have: there is often fine print stating that you must report any accident injuries to the insurer, and that they are entitled to reimbursement if you receive an award in a lawsuit.
What to Do If You Are Facing a Lien
Facing a lien can be an incredibly difficult experience, especially if you were counting on the compensation to pay for essential medical treatment you need to recover.
But if you are facing a lien, all is not lost, and you will not necessarily have to turn over your entire settlement to any lienholder. In most cases, in order to have the best possible outcome for your case, it’s a good idea to work with a Passaic County personal injury lawyer.
The first step is to never ignore a lien against you, as ignoring it can potentially result in criminal charges. If you are aware of a potential lien you could face, you should account for this when you submit your insurance claim. Base your demand on the entire cost of your medical expenses rather than your co-payments or the reduced amounts that were paid by your insurance company. This will prevent you from losing significant compensation if a lien is filed. If you are not sure how to properly value your case, an experienced personal injury attorney can help you.
A lawyer can also help you get a better outcome with a lien through actions you cannot perform on your own. At Bavagnoli & Bavagnoli, we frequently negotiate medical or worker’s compensation lien terms by doing a couple of things. For one, we can negotiate the amount of the lien that you must pay back and often get it significantly reduced. We may also be able to dispute the basis of the lien if the third party is not truly entitled to part of your settlement. Because we handle these cases often, we are skilled at determining whether the lien is valid and at negotiating favorable outcomes for victims. This has led us to an overwhelming success rate when it comes to getting our clients good outcomes in cases involving liens.
Facing a lien alone can be incredibly disheartening and scary, but we are committed to supporting our clients throughout the process. We will help you understand the nature of the lien as well as your legal rights in terms you can understand. We will also work personally with you: answering any questions and taking your calls at any time. Regardless of your income or the severity of the situation at hand, we will be here to help ensure that you can pay your bills. Our goal is to always do right by our clients even if it takes time. We will never settle too quickly, and will fight to get you the maximum amount of compensation you deserve.
If you have questions about a lien that has been placed on your settlement, get in touch with Bavagnoli & Bavagnoli today at (973) 785-9522.