If you have been involved in a motor vehicle accident and retained a Florida personal injury attorney, then you have probably heard that attorney talk to you about subrogation claims, liens, or other claims that must be satisfied from your personal injury settlement. Several strict rules are in place governing personal injury settlements. Some of these rules protect your private health insurance company (i.e. FloridaBlue, Aetna, United Healthcare, etc.), Tricare, Florida Medicaid, Medicare, or a Worker’s Compensation carrier. If any of these entities or organizations have paid all or part of your medical bills and/or lost wages, you are obligated to ensure that they are reimbursed when you settle your personal injury claim. As this process has become more complex, some companies and attorneys have started to provide services in assisting with the resolution of medical liens or subrogation claims. After years of litigation and two trips to the Florida Supreme Court, the Florida Bar Board of Governors approved recommendations from its Board Review Committee on Professional Ethics (BRCPE) that would include having a judge oversee those arrangements and empowering that judge to change the compensation of your personal injury attorney and/or the attorney handling the lien. According to BRCPE’s Chair, Carl Schwait, who was interviewed for the Florida Bar News Journal, “there is, in fact, a cottage industry [for lien resolutions]. Normal personal injury lawyers may not have the ability to do lien resolutions following the trial. They go out and hire people who have a specialty in this lien resolution.”
The issue originally came to the Bar as an ethics inquiry: “Could the original contingency fee lawyer hire a second attorney to negotiate the liens at the end of the case, where the second attorney charges a fee based on the amount of money he/she saves the client on lien payments?”. The ethics question came up because if the original attorney received the maximum fee of 40 percent, for most causes under Florida Bar Rule 4-1.5, then any amount paid to the lien attorney would raise the fees over the 40 percent maximum…even though the client would receive more money.
The issue eventually landed before the Florida Bar Board of Governors, which drafted an amendment to the rules allowing lien attorneys to be hired under those circumstances. But the Florida Supreme Court rejected that amendment, holding that the original personal injury attorney should handle the lien negotiations as part of his/her 40 percent fee or pay from his/her fee the lien attorney to handle the post-settlement negotiations. The Florida Bar Board of Governs were concerned this would remove the incentive to negotiate liens for many attorneys which in turn would harm clients. So the board redrafted the amendment proposing that only in extraordinary cases could lien attorneys be hired. The Florida Supreme Court Justices questioned the proposal during oral arguments last May, which led the Bar to seek a stay in that case so it could work on the rules again. Several concerns were raised by the Florida Supreme Court Justices, including requiring written and informed consent from the client before hiring the lien attorney. The Justices also wanted the trial judge to have the ability to adjust the fee of the lien attorney. The proposed rule would provide that, “The court or applicable tribunal, after reviewing the totality of all relevant circumstances, may also adjust the fee of the primary lawyer, including so that the combined fee of both the primary lawyer and the extraordinary lien and subrogation lawyer do not exceed the contingent fee schedule for personal injury and wrongful death matters” set out in Rule 4-1.5.
We must wait and see how the Florida Supreme Court will rule. Regardless, the victim’s rights are continuing to be protected in Florida. My best guess would be that the injured victim will be the recipient of further benefits when the debate is concluded. This will be a win for the people residing in Florida or bringing claims in Florida.
If you have been injured in an accident and you have questions on whether you will be obligated to repay your health insurance carrier or any other entity, contact the attorneys at Brannon & Brannon for a free consultation.