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Supreme Court Rejects Change in Lien Res. Outsourcing

After nearly five years, on October 6, 2016, the Florida Supreme Court issued Opinion SC16-104 and declined to make any change to the existing Rules Regulating the Florida Bar in relation to lien resolution outsourcing. As Florida’s trial attorneys know, the issue of whether there was a need for a change in the existing rules has festered in the Florida Bar Association for years. The issue was raised by a lawyer who requested that the Florida Bar address a reverse contingency fee on the reduction of hospital liens. From there, the Florida Bar has tried to craft a rule regarding outsourcing which ultimately has been rejected by the Florida Supreme Court several times.

The Florida Bar Association had created a proposed rule to address a concern that outsourcing lien resolution services could further reduce an injury victim’s net recovery. In responding to that concern, the Supreme Court used dicta in Opinion SC16-104 to remind counsel that addressing repayment obligations is part of the representation that is expected during the underlying personal injury action. The Court said:

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.

The Court goes on to say in dicta that:

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.

It is unfortunate that the Court’s dicta is focused on the financial circumstances of the trial attorney rather than on what is most beneficial to the injury victim. In their proposal for a change even the Florida Bar Association acknowledged that in order to “maximize the client’s net recovery,” it may be that the “client’s best interest [are] served by having the lien and subrogation matters resolved by another with significant experience in the field.”[1] Synergy Lien Resolution Services (SLRS) was founded on that principle and has always operated under policies/ procedures designed to maximize the plaintiff’s net recovery. Additionally, the backbone principle of SLRS’s industry leading fee structure is based upon our ability to demonstrate a quantifiable value add to the injury victim’s net recovery.

Understandably the disconnect between the issue presented by the Florida Bar, and the dicta from the Court has left many Florida trial attorneys confused. Thus, it is important to remember that the Court refused to make a rule change so as before this ruling trial counsel must make reasonable efforts to identify any lien, advise the client of the potential lien, and make reasonable efforts to resolve the matter. Should trial counsel believe it would be in the plaintiff’s best interest to engage an expert, then outsourcing to SLRS for an additional fee is ethically authorized.[2] If there is a concern regarding whether the fees to reduce the lien may be passed along to the client, SLRS will assist with getting an order from the court with jurisdiction to approve all fees in conformance with 1.5(f)(4)(B)(ii).

SLRS processes are designed to assist Florida attorneys in compliance with the existing rules. SLRS can provide lien resolution outsourcing language which can be incorporated into retainer agreements. Additionally, upon engagement, SLRS will provide the required separate written informed consent. This separate informed consent has been required by the American Bar Association since 2008 and is contained in all SLRS intake packages. Finally, as discussed above, SLRS will assist trial counsel in obtaining court approval of the lien resolution fee. SLRS regularly assists counsel (specifically guardians of our minor and catastrophically injured clients) in obtaining court approval of our “savings” based fees, wherein we are regularly complimented by the court for the reasonableness of our fees.

In the end, each Florida attorney will have to decide what they believe the best course of action is given all of the foregoing. SLRS stands ready to assist in any way we can.

[1] Rule 4-1.5(f)(4)(E) Comments

[2] IN RE: Amendments to Rule Regulating the Florida Bar 4-1.5-Fees and Costs for Legal Services.

Florida Sup. Ct. No. SC16-104

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