Category Archives: Contingency fee agreements

Florida Supreme Court rejects Bar proposed rule amendment on resolution of extraordinary liens in contingency matters

Hello and welcome to this Ethics Alert update blog which will discuss the Florida Supreme Court’s rejection of a proposed amendment to Florida Bar Rule 4-1.5(f) which would have permitted a lawyer to retain and pay another lawyer (or non-lawyer entity) to resolve extraordinary liens in contingency matters and pay that lawyer’s fee from the settlement proceeds.  I previously blogged about the proposed revisions to Rule 4-1.5(f) in my 6/6/13, 9/5/13, and 12/14/15 Ethics Alerts.

The October 6, 2016 Florida Supreme Court opinion rejected the Bar’s proposed amendment to Rule 4-1.5(f) which would have specifically permitted the lawyer/client to retain an “extraordinary lien and subrogation lawyer” to resolve extraordinary liens and be paid a fee by the client beyond the contingent fee.  The Florida Supreme Court opinion is here:  http://www.floridasupremecourt.org/decisions/2016/sc16-104.pdf

In rejecting the Florida Bar’s proposed amendment to 4-1.5(f), the opinion stated:

On balance, we wish to reemphasize that lawyers representing clients in personal injury, wrongful death, or other cases where there is a contingent fee should, as part of the representation, also represent those clients in resolving medical liens and subrogation claims related to the underlying case. This should be done at no additional charge to the client beyond the maximum contingency fee, even if the attorney outsources this work to another attorney or non-attorney.

Although it may be true that, given the increased complexity of modern litigation, there will be some cases where the amount of work required to resolve a lien is more than initially anticipated, the notion of the percentage fee contract contemplates that there will be some cases that are profitable for the lawyer handling the claim and others that are unprofitable. That risk and reward is built into the contingency fee contract. 

If the circumstances of a particular case are such that the fee generated under the contingency fee agreement is expected to be insufficient for the work of resolving any outstanding lien, the attorney and client can seek leave of court pursuant to rule 4-1.5(f)(4)(B)(ii) of the Rules Regulating the Florida Bar to obtain an increased fee appropriate for the circumstances of the specific case.  (emphasis supplied).

Bottom line:  Pursuant to the language in the Court’s opinion, lawyers should be wary of participating in an agreement with a third party in which the client would pay a percentage of any reduction in the lien amount or any other payment for the reduction/resolution of the lien.

Be careful out there.

Disclaimer:  this Ethics Alert blog is for informational purposes only, is not an advertisement, and does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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The Florida Bar’s Board of Governors gives final approval to Bar Rule 4-1.5(f) amendment related to resolution of extraordinary liens in contingency matters

Hello and welcome to this Ethics Alert blog which will discuss the recent approval by The Florida Bar’s Board of Governors (BOG) of an amendment to Florida Bar Rule 4-1.5(f) related to extraordinary liens in contingency matters.  I previously blogged about the proposed revisions to Bar Rule 4-1.5(f) in my 6/6/13 and 9/5/13 Ethics Alerts.

At its meeting on December 4, 2015, the BOG waived second reading of the proposed rule and took final action and the proposed rule amendment will be filed in the existing case: In Re: Amendments to Rule Regulating The Florida Bar 4-1.5 – Fees and Costs for Legal Services, Case No. SC14-2112 on January 15, 2016, pursuant the Supreme Court’s order in that case.

The BOG had previously approved an amendment to the rule allowing the retention of attorneys to handle medical and other liens under a reverse contingency fee with the consent of the client; however, the Florida Supreme Court rejected that rule amendment and opined that it is the responsibility of the lawyer as part of the original contingency contract to resolve the liens.

The rule amendment that was approved by the BOG on December 4, 2015 addresses the use of lien modification attorneys at the end of a personal injury or wrongful death case to handle negotiations over extraordinary liens.

Under the proposed amendment, attorneys can be employed in extraordinary cases with full disclosure and written approval of the client and with a judge’s approval. The judge would also be authorized to review and adjust the fees both of the main tort attorney and attorneys handling the liens.

Bottom line:  As I previously stated, it is the general practice of lawyers in Florida to resolve client liens on behalf of the client as part of the representation; therefore, this revision will not generally impact lawyers in most cases; however, if there are extraordinary circumstances, the proposed rule revision would require the client to give written approval the retention of the attorney to handle the extraordinary liens.  A judge would also have to give approval and would be authorized to review and adjust the fees both of the main tort attorney and attorneys handling the liens.

Be careful out there!

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Filed under Attorney Ethics, Contingency fee agreements, Florida Bar, Florida Bar rule 4-1.5 resolution of extraordinary liens, Florida Bar rule amendment resolution of extraordinary liens, Florida Lawyer Ethics and Professionalism, joe corsmeier, Joseph Corsmeier, Lawyer lien resolution in contingency cases

The Florida Bar’s Rules Committee will propose additional changes to Bar Rules related to resolution of extraordinary liens in contingency matters

Hello and welcome to this Ethics Alert blog which will discuss the recent activity of The Florida Bar and the Board of Governors (BOG) related to the requirement that lawyers be required to resolve outstanding liens as part of the representation in contingency matters.  I previously blogged about the BOG’s approval of proposed revision to Bar Rule 4-1.5 to require lawyers to resolve the liens in my June 6, 2013 Ethics Alert.  The BOG initially approved the proposed rule revision at its meeting on May 31, 2013 and would add new subdivision (E) to Rule 4-1.5(f)(4) if approved by the Florida Supreme Court.

According to an article in the September 1, 2013 issue of The Florida Bar News, the Bar Rules Committee is revising the language of the revised rule which would allow the retention of another law firm to handle medical lien resolutions in contingency cases under certain circumstances.  The chair of the Bar Rules Committee told the Board of Governors (BOG) at its July 2013 meeting that questions came up after the BOG approved the amendments at its May 31, 2013 meeting, including when an outside attorney could be retained by the client to handle lien resolutions.

The chair stated that “(i)t was recognized that there were some extraordinary things that came into play with Medicaid and Medicare, and sometimes the lawyer is in over his head, and there are professionals who do that sort of thing.”  The change would clarify that the original lawyer may not receive any additional fee for handling lien resolutions under the original contingency fee agreement and also cannot split fees or receive any extra payment if lien resolutions are turned over to another lawyer.

The BOG had previously proposed an amendment to the rule allowing the retention of attorneys to handle medical and other liens under a reverse contingency fee with the consent of the client; however, the Florida Supreme Court rejected that rule amendment and opined that it is the responsibility of the lawyer as part of the original contingency contract to resolve the liens. The new proposed rule would permit the liens to be handled by another lawyer in extraordinary circumstances since the client would benefit by having those liens resolved by a lawyer concentrating in that area.  The revised rule will be placed on the BOG’s October 2013 meeting agenda for review and potential approval.

The current proposed rule revision language is as follows:

RULE 4-1.5 FEES AND COSTS FOR LEGAL SERVICES

 

4-1.5(f)(4)

 

1.  a lawyer in a personal injury or wrongful death case charging a contingent fee must provide ordinary lien resolution as part of the lawyer’s representation under the fee contract may not charge any additional fee to the client for providing such services, if all fees for the personal injury matter plus lien resolution exceed the contingent fee schedule;

 

2.  extraordinary services for subrogation and lien resolution may be referred to another only with the client’s informed consent, that additional fees by the other lawyer must comply with all provisions of the fee rule and,

 

3.  the lawyer providing the extraordinary subrogation and lien resolution services may not divide fees with the lawyer handling the personal injury or wrongful death claim. The comment explains what lien resolution services are required as part of the original fee contract and what extraordinary services include. 

Bottom line:  As I previously stated, it is the general practice of lawyers in Florida to resolve client liens on behalf of the client as part of the representation; therefore, this revision will not generally impact lawyers in most cases; however, if there are extraordinary circumstances, the proposed rule revision will detail the circumstances which would permit the client to retain separate counsel to handle and resolve those liens and provide guidance regarding those circumstances.

I will keep you posted and be careful out there!

Disclaimer:  this e-mail does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

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Filed under Contingency fee agreements, Florida Bar, Florida Lawyer Ethics and Professionalism, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer fee agreements, Lawyer lien resolution in contingency cases, Lien resolution

Bar Ethics Committee will decide whether to modify or withdraw Ethics Op. 87-4 which allows lawyers to offer 2 contracts to PI clients

Hello everyone and welcome to this Ethics Alert blog which will discuss the recent Notice in the April 30, 2013 issue of The Florida Bar News advising that the Bar’s Professional Ethics Committee (PEC) will consider whether to modify or withdraw current Florida Bar Ethics Opinion 87-4, which states that lawyers may offer personal injury clients a choice between two contingent fee contracts with differing percentage fees depending on whether the client or the lawyer will assume responsibility for submitting the client’s medical bills for payment as long as neither percentage exceeds the maximum allowed under the contingency fee requirements of the Rules Regulating The Florida Bar.  The Florida Bar’s Notice is at http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa900624829/39825807a56dd34185257b5500458f47!OpenDocument and Ethics Opinion 87-4 is at: http://www.floridabar.org/tfb/tfbetopin.nsf/SearchView/ETHICS,+OPINION+87-4?opendocument

The PEC will consider whether to withdraw or modify Ethics Opinion 87-4 at its meeting at 2 pm on June 28, 2013 at the Boca Raton Resort & Club in conjunction with The Florida Bar Annual Convention.  The review of the Ethics Opinion for potential withdrawal or modification is in conjunction with the recent Notice that the Bar Board of Governors intends to take final action on proposed changes to the Florida Bar rules at its May 31, 2013 meeting in Sarasota.

The proposed Bar rule changes include proposed new Rule 4-1.5(f)(4)(E), which would prohibit a lawyer from charging any additional fee to the client for providing “ordinary lien resolution” and, if all fees for the personal injury matter plus lien resolution exceed the contingent fee schedule, “extraordinary services for subrogation and lien resolution” may be referred to another only with the client’s informed consent.  Further, any additional fees by the other lawyer must comply with all provisions of the fee rule and that the lawyer providing the extraordinary subrogation and lien resolution services may not divide fees with the lawyer handling the personal injury or wrongful death claim.  The Comment to the Rule “explains what lien resolution services are required as part of the original fee contract and what extraordinary services entail.”

Comments regarding the proposed modification or withdrawal can be directed to Elizabeth Tarbert, Bar Ethics Counsel in Tallahassee or by e-mail to the Bar Ethics Department at eto@flabar.org.

Bottom line:  This proposed Bar rule would impose (for the first time) a duty on Florida lawyers to provide “ordinary lien resolution” services in all personal injury and wrongful death matters.  If the proposed rule is implemented, one of the questions will be what is “ordinary lien resolution” and what constitutes “extraordinary services for subrogation and lien resolution”  As I have previously explained, if there are disputes regarding distribution of PI/wrongful death settlement funds, including disputes by third party lien holders, the lawyer can consider an interpleader action and placing the funds in the registry of the court.

Be careful out there!

Disclaimer: this e-mail does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Leave a comment

Filed under Attorney Ethics, Bar rules fee agreements, Contingency fee agreements, Florida Lawyer Ethics and Professionalism, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer ethics opinions, Lawyer fee agreements, Lawyer improper fees, Lien resolution