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Lien Confirmation for Lienholders: Why & How

October 29, 2018
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7min read

Many personal injury service providers – medical providers, plaintiff and medical funders, etc. – who are paid on contingency believe that all they need to get paid for their services is a written agreement with the plaintiff’s attorney. But, unfortunately, service providers need to be much more proactive: You must confirm your agreement with the plaintiff’s attorney.

We call this “lien confirmation.” Within the context of personal injury, a “lien” is a financial stake in a personal injury case. If you provide services on contingency to a plaintiff, no matter what they are, you are effectively a “lienholder” in that plaintiff’s case. Once an attorney or client has signed a lien agreement with you, you should still confirm your lien is “on file,” whatever that may mean for a specific firm. Why?

a)     You aren’t the only lienholder: A single personal injury case can easily have dozens of lienholders, and it’s difficult for anyone to keep track of who is owed what. Your lien may be very important to you, but it is likely not the attorney’s top priority. Some lienholders so keenly know this to be true that they mail neon stickers for attorneys to stick to case files so at the end of the case it’s impossible for them to be forgotten. Amazingly, many report they are still forgotten.

b)     Personal injury attorneys can be unorganized: Many attorneys still rely on paper filing, outdated computer systems, or, most harrowing of all, their memory. An attorney once told us that he became so aggravated during a negotiation with an insurance company, he flung his client's physical file across the room and "couldn't tell you what fell out!" In addition, many firms are overworked and buried in physical and digital paperwork, demanding clients, and hundreds of shifting priorities. It's easy for a grain of sand to slip through the cracks.

As a reminder, before you begin the process of lien confirmation, make sure you’ve done the “pre-work” to ensure the attorney you are working with is a reliable escrow agent and that you have the right legal agreement in place for your lien.


How to Confirm Your Lien

Lien confirmation should be completed within a few days or weeks of the date in which you provided your services. You can do it by phone, email, or certified mail.

The basic ingredients of a lien confirmation are the following:

1. Plaintiff’s name

2. Service provider’s name

3. Type of service (e.g. surgery, MRI, financing)

4. Date that service will be or was rendered

5. Request that the attorney confirm that your lien is on plaintiff’s file

For specific templates that you can adapt for your needs, see the “Appendix: Templates for Lien Confirmation” at the bottom of this blogpost.

Reconfirming

Confirmation is not a one-time process. Sometimes you have to rinse and repeat. Many lienholders don’t get paid even after confirming their liens—it happens all the time.

Sometimes it’s due to a combination of disorganization and poor technological practices by the plaintiff’s attorney. We know a lienholder who confirmed his lien with an attorney multiple times over the course of 3-4 years. When the case settled, the attorney forgot to pay the lienholder because the lien was on file in his “office computer,” and he was working from home on his “personal laptop” during the months in which the case settled.

Sometimes it’s due to attorneys not realizing that a “lien” has been fully executed on all sides. Although service providers may possess written acknowledgement of their liens, they technically don’t have a lien until they actually perform their services, whether it be providing medical services or funds to plaintiffs. Because plaintiffs – or service providers – can change their mind after a lien agreement about whether they want to actually receive or deliver the services in question, attorneys often need re-confirmation that the service has been provided (e.g. plaintiff was treated, plaintiff was advanced money), and that a lien has been fully executed.

Sometimes it’s about attorneys not having the correct lien balance on file. A medical provider may receive a letter of protection from a plaintiff’s attorney concerning a $5,000 treatment that she is going to perform on the plaintiff. While the plaintiff is awaiting settlement, which is a few years away, the provider treats the plaintiff several more times, totaling over $20,000 in her lien. But the attorney may only have the original $5,000 recorded in her file, and so when it comes to payment, he pays her only a fourth of what she was owed. The same phenomenon occurs for legal and medical funders who deliver multiple advances to a plaintiff over the course of a few years—attorneys may only have a record of the first advance on file.

All of these situations can occur even after a lien is confirmed, which is why re-confirmation is vitally important. Something can always go wrong, which is why lienholders have to take a proactive approach and help attorneys organize themselves through instituting a foolproof process that ensures no lien gets left behind.

Appendix: Templates for Lien Confirmation

a) Confirm by Phone

Make sure to note who you spoke with at the firm for your records.

If you’re a medical provider, here’s a template your team can use:

Hi this is [Your Name] from [Medical Provider], just calling to let you know that [Plaintiff Name] received treatment from [Medical Provider] following their accident on [Date of Loss]. Can you please confirm that you have this lien on [Plaintiff]’s file? Great, thank you. One last thing, may I get your name?

If you’re a funder, here is a template your servicing team can use:

Hi this is [Your Name] from [Your Funding Company], just calling to let you know that [Plaintiff Name] received financing from [Your Funding Company] on [date Plaintiff received financing].

Can you please confirm that you have this lien on [Plaintiff's] file? Great, thank you. One last thing, may I get your name?

Once you get a confirmation by phone, make sure to create a paper trail by following up with a quick email that lays out who you spoke and what was said. This isn’t to “tie the attorney up,” but rather so they can print it or have record of it in email for the future.

b) Confirm by Email

Send the appropriate case manager, paralegal, or attorney a digital version of the fully-executed agreement and ask them to acknowledge the receipt and to state that the agreement is, or will be, properly filed with the client's documents.

If you’re a medical provider, here’s a template your team can use:

Hi [Paralegal/Attorney Contact],

We provided [Plaintiff Name] with medical treatment. Attached are the bill and signed lien agreement for you records.

Please reply to this email confirming that you have our lien on file.

If you’re a funder, here is a template your servicing team can use:

Hi [Paralegal/Attorney Contact], we financed [Plaintiff Name] on [date Plaintiff received financing]. Attached is the signed financing agreement for you records.

Please reply to this email confirming that you have our lien on file.

c) Confirm by Certified Mail

Sending the fully-executed agreement and notice of a lien to the law firm via certified mail provides you with a receipt to prove your mailing, and upon request, electronic verification that the mailing was delivered. It’s not that certified mail is inherently better, but that law firms often treat certified mail more seriously.  Some lienholders choose to use certified mail for large lien amounts ($25,000 or more), or for law firms with whom  they aren’t familiar.

Photo credit: Rawpixel via pixabay

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