Money and liens
Lien
A lien is a legal claim on settlement proceeds that must be satisfied out of the recovery before the claimant receives their share.
Liens come from medical providers, health insurers exercising subrogation rights, government programs such as Medicare and Medicaid, and funding companies.
They are frequently negotiable, and reducing them is one of the most valuable things a good attorney does. It can add thousands to a net recovery.
Stacked liens are the most common reason a funding application is declined — if the claims on the case already exceed its likely value, there is nothing to advance against.
Related terms
- Medical lien — A medical lien is a healthcare provider's claim on a settlement for treatment given on credit while the case was pending, repaid from the recovery before the claimant's share.
- Subrogation — Subrogation is a health insurer's right to be reimbursed from a claimant's settlement for medical costs it paid in connection with the injury.
- Disbursement — Disbursement is the payment of settlement funds out of an attorney's trust account, following the order of attorney fees and costs, then liens, then the claimant's remaining share.
- Funding agreement — A funding agreement is the contract between a claimant and a funding company setting out the amount advanced, the charges, the repayment schedule and the lien against the case proceeds.
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