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What does having a lien in a personal injury case mean?

If you have a personal injury claim, you may receive a letter from a company asserting a 'lien' to any amount that you recover. So what does that mean?

Basically, it is a company (or the government) claiming that you need to reimburse them for any settlement or verdict you receive from your accident case. They have paid money to a health care provider, or have paid you lost wages. Now they want you to reimburse them for payments they made when you receive money from the tortfeasor's (the person who injured you) insurance company.

Here is the catch:

Not all liens are valid. Many companies will assert liens when they have no right to do so. Virginia has several statutes that identify which liens are valid, and which are not. An insurance company that pays medical payments benefits rarely has the right to assert a valid lien. On the other hand, Medicare/Medicaid liens are almost always valid.

Here is another catch:

Even if there is a valid lien, many companies will accept a reduced amount to satisfy their lien. For example, let's say a case is about to settle for $100,000. An ERISA lienholder claims they have a $25,000 lien. It is possible to negotiate that lien down. Many times, the lien holder will except 2/3, 1/2, or even less of their claimed lien.

If you have a personal injury claim of any significance, it is important to hire an experienced personal injury law firm that can navigate the complicated issues of liens. The difference between defeating improperly asserted liens, or negotiating them downward, versus simply paying the lien, can be thousands of dollars.