In personal injury settlement claims, there are typically several lienholders laying claim to an injured person’s settlement. Typically attorneys, hospitals, and medical professionals attach to settlement claims or judgments. In many instances, this can be a positive thing for those who are uninsured, as they can receive medical care for their claim and the medical professionals can recover for their services.
Illinois has recently changed its laws regarding the amount of recovery lienholders can expect from personal injury claims. Previously, each lienholder could take up to one-third of a settlement claim so long as each lienholder was attaching under a statute separate from another lienholder. For instance, a physician and a hospital can each take up to one-third because each would seek to recover under a different act. Two hospitals, however, would be limited to up to one-third together because they are each seeking to recover under the same act. As you can imagine, in some instances, injured parties were left with very little after the litigation.
In response to this the Illinois legislature enacted the Healthcare Services Lien Act. It repeals the previous eight medical services acts under the previous law along with portions of the Attorneys’ Lien Act. In the new Act there are only two types of healthcare services: providers and professionals. Combined these two categories cannot exceed 40% of recovery and an individual category cannot exceed 33%. In an instance where the healthcare liens exceed 40% then each healthcare type is capped at 20% each for recovery. Attorneys’ fees cannot exceed 30% in this instance as well.
Liens need to be perfected before they become effective. Notice needs to be served to the injured party and the party against whom the claim is pending.
Note that this new Act does not pertain to liens under the Workers’ Compensation Act. There is a separate statute for those liens.
Injured parties can request documentation regarding the medical services performed under the Act. Lienholders have 20 days to provide the requested information or they risk their lien becoming null and void. This is a strategy that can be used by attorneys to extinguish any liens to provide the injured party with a higher settlement. Attorneys should keep this in mind during settlement negotiations, as methods to increase the final settlement have been diminished due to the Act capping liens for healthcare services.
Subrogation is not included in the percentage totals, and it may be relevant for an attorney to note that this may substantially decrease the plaintiff’s award. Attorneys should always keep track of the number of liens filed on a claim to avoid situations where the plaintiff is unable to receive any settlement money.
This article is for general informational purposes only and is not to be construed as legal advice. Do not rely on the above information as all cases are different and different laws apply to different cases.
Consult an attorney in your area for further guidance. If you were injured by an accident please call one of our attorneys at David K. Kremin & Associates, and we will give you a free consultation. We never charge unless we collect for you. Please call 1(800) ASK-A-LAWYER or 1(800)275-2529.