Attorney Liens Part 3: What are Retaining Liens and Charging Liens?
Attorney liens are the ultimate sign of a broken relationship between attorney and client. Part 1 discussed what an attorney lien is and Part 2 highlighted the requirements and limitations of an attorney lien. This final part will discuss the two most favored types of attorney liens: retaining liens and charging liens.
In Florida, the case file your attorney builds as he works on your case – containing your attorney’s notes, investigation reports, expert opinion summaries, and other potential evidence vital to your case – is considered to be your attorney’s property. Though you can normally access it and get copies of it (often at your own expense), you generally aren’t entitled to take your file with you when you leave the firm.
If your first attorney withdraws from your case, your new attorney will normally request a copy of the first attorney’s case file since, without it, she would have to complete all the work already accomplished by the first attorney, causing expensive delays that could potentially damage your case. While your original attorney still has an ethical duty to not damage your case, he has a right to be paid according to the terms of the contract as well.
If you and your original attorney cannot work out an arrangement that ensures that he will be paid what you contracted for, he may seek to retain your file as surety for the debt. In essence, a retaining lien is a way for your former attorney to hold your file hostage until he receives payment or an assurance that he will be paid out of the settlement or award received in your case.
A retaining lien is subject to the limitations discussed in Part 2, and is vastly limited in contingency fee arrangements. If your contingency fee contract dictates that your attorney must pay for the costs and expenses of the litigation unless and until your case returns with a settlement or favorable verdict, he cannot retain your file, since he would have no right to payment until the contingency (the lawsuit’s success) occurred. If, however, your contract dictates that you are responsible for part of the litigation expenses regardless of how the case ends, your former attorney may be able to retain your file until your portion of the expenses is paid.
You should also be aware that your attorney may be able to retain funds he is holding for you – though there are strict limitations on what sort of funds he may retain. For example, attorneys may rarely retain any portion of funds held for a specific purpose (such as to guarantee a loan), even if the funds exceed the amount needed for the designated purpose. Again, review your contract carefully to see whether it contains language that allows him to retain your funds to pay his fees and costs, and under what circumstances.
If your former attorney has filed a retaining lien on your case file or funds, your new attorney should be able to advise you on how best to proceed. If your case might be damaged by the retaining lien or if the attorney’s claimed fees and costs are unreasonable, you may be able to defeat the lien.
Another common type of attorney lien is known as a charging lien, which allows your attorney to claim a portion of the future settlement or judgment in your case.
In order for an attorney to succeed in a lien application, he must be able to demonstrate that his work contributed substantially to your case – so if you feel that his representation and/or subsequent withdrawal actually harmed your case, you may be able to challenge his lien and his right to receive any payment.
For both types of liens, your former attorney’s claim for payment is limited by law to the reasonable value of his services and also by the contract you signed. For example, if your attorney anticipated receiving 33% of your award and you settled the case for $600,000, he cannot claim $200,000 when he only put in ten hours of work before withdrawing. So, too, if your contract limited his fee to $5000, he likely cannot later claim more than that, even if the actual hours he spent on your case at a reasonable billing rate would have exceeded that amount.
If your former attorney has threatened to file or has actually filed a lien against your judgment or if he is retaining needed information that is essential to the success of your case, Wagner, McLaughlin & Whittemore can help. We have extensive experience dealing with tort litigation and the different liens that may become involved.. Contact us today for a consultation.