Lien

A lien is a legal right allowing a creditor to claim against settlement funds before the plaintiff receives their share. In PI cases, common liens include: medical provider liens (doctors who treated on a letter-of-protection basis expecting payment from settlement), health insurer liens (ERISA plans asserting reimbursement rights under plan terms), Medicare/Medicaid liens (federal and state programs asserting recovery rights for treatment paid), and attorney fee liens (if another attorney began work). Properly handling liens requires identifying all potential lienholders early, obtaining documentation of claimed amounts, and negotiating reductions where possible (insurers often accept less than full amounts). Attorneys have ethical obligations to address valid liens from settlement proceeds. Failure to properly account for and pay liens can create legal liability and disciplinary issues. Case management software often tracks known liens and calculates net settlement figures after lien resolution.