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How Much of My Injury Settlement Goes To Pay Case Liens? It Depends on the State and Your Attorney

Posted on Wednesday, March 4th, 2015 at 11:51 am    

Claim LienMost people think that a lawsuit ends when the case is settled or the jury gives its award following a trial. Even many lawyers believe this, and that is how you spot an attorney that doesn’t have any business practicing personal injury law. In truth, a great deal of negotiating with lienholders follows the jury’s verdict or case settlement. In the last twenty years, many laws have been passed that favor insurance companies at the expense of injured American citizens, and some of these laws sharply reduce the net amount of a settlement or judgment. Case liens can come from a great many sources, but the vast majority are related to medical bills in one way or another. The amount of money that has to be paid to these medical lienholders varies by state and by the kind of company asserting the lien. Differing state philosophies is most easily shown by looking at the Greater Cincinnati area.

Greater Cincinnati Case Lien Process

If you get injured in Southern Ohio, you fall under the Ohio state rule. That rule says that you can only recover medical damages in a lawsuit up to the amount that your insurance company actually paid to the medical provider. This is a bad rule, because it requires the injured person to go the trouble of proving liability and recovering the money, but allows a free-riding insurance company to get all the money back. In the meantime, the person or company that was liable gets a break by not having to pay the full amount of the medical bills!

Northern Kentucky Case Lien Process

Kentucky allows you to claim the full amount of your medical bill at trial and, after proving the other party liable and collecting the damages, you only have to pay the insurance company the exact amount they paid toward the bill. The injured person keeps the rest. The Northern Kentucky rule decides that a liable person or company should not get a break on the amount of damages they caused, although it does still allow most insurance companies to free-ride. The Northern Kentucky rule also wisely reasons that any extra money kept by the injured person is justly due, because the injured person paid the premiums to the insurance company in the first place!

The Type of Organization Issuing the Lien Matters

The type of company putting a lien on the case is a big factor is how much the lien can be reduced. Government agencies like Medicare and Medicaid absolutely must be paid back, but they are often willing to negotiate a much lower payback than 100%. On the other hand, health insurance plans created under ERISA (which basically includes every health insurance plan that comes through your or your spouse’s employment) must also be paid back and they are generally unwilling to reduce their lien by more than a token amount. Actual medical providers, such as hospitals and ambulance companies, should be paid out of a lawsuit although it is more of an ethical rather than a legal requirement. (Still, if you don’t pay them they will likely sue you for the payment.) Medical providers do not have the same legal protections that insurance companies do, and they generally charge uninsured patients at an inflated rate compared to what they would charge an insurance company. Therefore, medical providers are generally willing to take a big reduction on their lien to ensure getting paid.

A Good Personal Injury Attorney Will Look at the Whole Picture When Working Toward a Settlement

A good Northern Kentucky Personal Injury Attorney will determine whether your case should be settled or go to trial and should include not only the client but all the lienholders as well. A Personal Injury Lawyer should make everyone agree to reduce their liens by a certain amount based on whatever settlement offer is on the table. That way, you will always know exactly what to expect out of a given settlement, and never get an unpleasant surprise after the settlement negotiations are over. Some Northern Kentucky attorneys don’t give their clients this “whole picture” approach to a settlement, and their clients should justifiably be upset if they find out their settlement netted less money than they expected.

At Lawrence & Associates, we have negotiated thousands of liens and recovered millions of dollars for our clients. We’re Working Hard for the Working Class, and we’d be proud to represent you.

Contact Us (859.371.5997) for a Free Consultation

Think You Have a Case? Should You Sue? What Are the Costs of Litigation?

Posted on Friday, October 17th, 2014 at 1:28 pm    

Litigation DecisionsThe litigation costs are usually the primary factor to be considered when determining whether to pursue a lawsuit. Although some suits are pursued for other reasons than monetary gain, the reality is that if a judgment is unlikely to cover the legal costs, then it is not financially worthwhile to pursue the suit. On the other hand, if the judgment is likely to cover the costs of litigation (and then some), the probability that a settlement with the Defendant will be attained also.

So, litigation costs are very important, and should be calculated earlier on by both the party wishing to pursue a claim and the attorney whom is being asked to pursue the claim on that party’s behalf. These costs generally include court fees, expert fees, deposition fees, reports or other projects, legal research fees, private investigation fees, accident reconstruction fees, etc.

Who covers the expenses?

If the potential costs of litigation are too great for the party to cover, this might prevent that party from pursuing his claim. However, as is common with most Personal Injury attorneys/firms, the party can contract with his or her attorney to cover the expenses and, in some instances, reimburse those costs if the claim results in a settlement or judgment that is enough to cover such expenses. This type of arrangement is quite common in a contingency fee agreement. The Supreme Court Rules of Kentucky allow a firm or attorney to forward all litigation expenses and either require or not require repayment of said expenses.

In the event the attorney cannot cover the case expenses either, that attorney should generally refuse to take on the case, since accepting it would result in a disservice to the client and a disadvantage to the attorney.

Does the other party ever cover the costs of litigation?

The General Law in the United States is that the loser in a case will not be forced to pay for the other party’s costs of litigation, except under special circumstances. The two main circumstances are when the parties contractually agreed that the loser pay for these costs, and where there are specific statutes in place that allow for the recovery of litigation costs (e.g., where a party committed a malicious and willful wrong against the public good).

In contrast, Kentucky statute provides that a successful party in any action shall recover his costs unless otherwise provided by law. However, it goes on to state that “[s]uccessful defendants who are necessary nominal parties shall not recover their costs and each party will pay their own expenses, [while] successful defendants who are not necessary parties will be awarded their costs.” Furthermore, the court has the discretion to award costs in actions between partners, tenants-in-common, joint tenants, settling of estates and partnerships, and enforcing trusts. KRS 453.040.

In Kentucky, the costs to be awarded include filing fees, fees incident to service of process and summoning of witnesses, jury fees, warning order attorney and guardian ad litem fees, costs of the originals of depositions, fees for extraordinary services ordered by the court to be paid, and other such costs as are ordinarily recoverable by the successful party. C.R. 54.04. It is important to note that this does NOT include Attorneys Fees.

Balancing the risks of Litigation

The pursuit of a claim will always involve some risks due to the litigations costs. If you have a claim, and are unsure about whether the costs of litigation outweigh the potential of your claim, consult an attorney before making this determination on your own. A good attorney will be able to judge the risks and balance them against a successful outcome. If you are located in Northern Kentucky, contact an attorney at Lawrence & Associates for a free consultation.

If you have a case that you would like to possible litigate in Kentucky or Ohio, contact us for some advice.  Lawrence & Associates has a long record of success in personal injury litigation in Kentucky and Ohio.

Contact Us in Kentucky: (859.371.5997) or Ohio: (513.351.5997) for a Free Consultation

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