plans are not handled by Mr. Seidel’s of- fice. In dealing with these plans, one can expect to see vigorous assertion of ERISA preemption and a very vigorous conten- tion that they are entitled to payment of 100 cents on the dollar for the lien which is being asserted.
K. Social Security Disability Social Security has two programs for disabled persons, Social Security Disabil- ity Insurance (SSDI) and Supplemental Security Income (SSI). SSDI benefits are based upon a
worker’s earnings, and there is no lien by Social Security for SSDI on personal in- jury claims. There is an offset provision that reduces SSDI benefits if an individual is receiving workers’ compensation ben- efits. However, as noted earlier, if there is a third party claim, and the workers’ com- pensation lien is satisfied, a good argument can be presented that the So- cial Security offset should not apply since there is no Social Security offset for re- coveries form personal injury claims. SSI benefits are available to persons
who are poor enough. A personal injury recovery, if a special needs trust is not es- tablished, can void a person’s eligibility for SSI benefits.
II. The Big Picture
In the midst of discussing the specifics of different types of liens, it is easy to lose sight of the big picture. The purpose of this section is to try to provide some per- spective and strategy.
Protect yourself Attorneys often become concerned about whether they can be held respon- sible by lien holders for liens about which they never receive noticed. The short answer is that with the exception of Medi- care,6
an attorney does not have direct
responsibility to a lien holder in the ab- sence of receiving written notice. While there are few circumstances un- der which the attorney can be directly responsible to a lien holder without being placed on written notice, the potential for having a dissatisfied client who could later try to contend that the attorney did not handle the lien situation correctly is much higher. As a result, communication with the client and management of the client’s expectations is critical. The attorney should inform the client early on about the possi- bility of liens and establish how the client
6
Please see the reference to Sally Hart’s article earlier.
Spring 2001 Trial Reporter 23
wishes to address them. Some clients will prefer that all liens be sought out and iden- tified and resolved so that there can be no possibility of additional obligations once the claim has been concluded. Other clients, however, feel differently and only want to deal with liens that are actually asserted. It is the client’s prerogative. However, the at- torney must be careful to protect himself/ herself. This can be accomplished by send- ing a letter to the client specifically outlining what approach the client wants to take with regard to liens. Additionally, on the settle- ment sheet itself, it is strongly recommended that the following notation be included: “Any and all open medical bills and liens are the client’s sole responsi- bility.”
2. Work for the client, not the lien holder
One of the first questions an attorney should be seeking an answer to in taking on a new personal injury case is whether or not the liens are going to prevent the case from being feasible to pursue. If there is limited insurance coverage, catastrophic injury, and a lien holder that is not willing to limit itself to half of the net recovery to the client, it may be best just to walk away from the case and not to take it. Other-
wise, the attorney may find himself or her- self in the position of trying to undertake the impossible task of satisfying a badly in- jured client and an aggressive lien holder from a limited source of funds. The attor- ney has to remember that he or she works for the client, not the lien holder.
If the
case is going to be primarily for the benefit of the lien holder instead of the client, then there may be an ethical problem in the form of a conflict of interest if the attorney pur- sues the claim.
3. Be prepared for aggressive behavior by lien holders
The collection of liens is big business.
Health plans recover millions upon mil- lions of dollars every year in the State of Maryland through subrogation claims as- serted in personal injury claims. As a result, lien holders can be aggressive.
In
fact, the trend has been for lien holders to be more aggressive, especially with the emergence of effective ERISA arguments under the Fourth Circuit’s decision in McGill. Sometimes, lien holders are un- reasonable and will cite McGill to take the position that they will not reduce their lien by a proportionate share of attorney’s
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