A lien is something that a PI lawyer often needs to discuss with his or her client. (“PI” is short for “personal injury.”) The reason being that liens often affect how much compensation an accident victim can recover on their claim. In this post, I will explain what a lien is, in a personal injury case.
A lien is simply a legal right to possession of property belonging to another person until a monetary obligation owed by that person is paid. In a personal injury case, the existence of a lien means, in effect, that someone else besides the victim has the right to be paid something out of the victim’s settlement funds. Usually, that “something” is the amount of medical bills that an insurer has paid for treatment of the victim’s injuries.
For example, say that you have a slip and fall accident. Imagine that you are on Medicare or Medicaid. Thus, Medicare or Medicaid pay for your medical bills.
When your case settles, federal law requires that you reimburse Medicare or Medicaid for those medical expenses. Such reimbursement comes out of your share of your settlement, before you get paid anything. That is an example of a lien.
Other insurers who may assert liens in personal injury claims include worker’s compensation insurers. Some health insurance plans (not all) of private employers also claim liens.
Another type of lien on a settlement in New Jersey arises if the victim owes child support. The victim must pay the outstanding support from his or her settlement.
How a Good PI Lawyer Can Help You with Liens
An experienced PI lawyer will be very familiar with liens. Accordingly, a veteran PI lawyer will consider any lien when determining how much compensation to ask the responsible party for. The goal is to get the victim adequate compensation, even after the lienholder takes its share. Moreover, a knowledgeable injury law attorney can sometimes persuade an insurer to reduce the amount of a lien.
Car accident victims in New Jersey can often avoid liens entirely by purchasing adequate medical insurance through their car insurance policy. However, they must select the option making such insurance primary coverage for motor vehicle accident injuries. This insurance is known as Personal Injury Protection, or PIP. PIP insurers typically will not assert any lien against the victim’s settlement. Therefore, all car owners generally should buy as much PIP medical coverage as possible.
Please note that this short blog post cannot possibly cover every type of lien that may arise in a personal injury case. Your best bet is to select an experienced attorney. A good PI lawyer will know how to best protect your injury case from liens and other common pitfalls.