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.
Retaining 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.
Charging Liens
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.
For more information on attorney liens, The Florida Bar has put together a Primer on Motions to Withdraw, and the Ethics Committee has provided an Informational Packet on Attorney Liens.
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.
In Part 1, we discussed what attorney liens are and when they might be used. This post will talk about the requirements and limitations of 
attorney liens.
Prerequisites
There are several things that must exist before your old attorney can file a lien to recover unpaid costs and fees. First and foremost is a valid contract that contains an understanding that you will pay your attorney. If you never agreed to give money to an attorney, he cannot later demand to be paid, no matter what work he may have done for you.
Next, there must be evidence that you are avoiding paying the attorney’s fees and costs you agreed to pay, as well as evidence that the attorney provided you with a timely notice of the fees and costs he believes you owe him. If you’ve already arranged payment, or if your attorney never even gave you an accounting of what he thinks you owe, a lien would be inappropriate and/or premature.
If those requirements have been met, the attorney can then file a notice of lien, setting forth exactly what he thinks he’s entitled to and his request as to how he’ll receive it.
Lien Limitations
Whether you’ve failed to pay him or not, your attorney is still ethically obligated to avoid prejudicing the interests of your case. This basic rule applies very differently depending on the circumstances, but if the lien might hurt your chances in court, there is a higher likelihood that it will be denied.
Contingency fee agreements – the type of contract most plaintiffs sign in personal injury cases – also bring special limitations. If your contract provides that you will owe your attorney nothing unless he recovers money for you, he cannot try to make you pay him anything unless and until that case is successful. If the case succeeds, however, your original attorney may be able to claim a portion of your award as reasonable attorney fees and to cover his costs.
Acceptable Reasons to Withdraw
Your attorney’s ability to file a lien for his fees and costs may hinge, among other factors, on whether his withdrawal was reasonable. If, for example, he withdrew from your case without giving a reason (or because he decided to become a professional golfer instead), and his withdrawal damaged your case, the court may well support you in your decision not to pay him for the work he did. If, however, his withdrawal was necessary or reasonable and if the court approved the withdrawal, it is likely that he will be able to recover reasonable fees and costs for the work he did, according to the terms of your contract.
There are several reasons to withdraw that are likely to be supported by the court, and Rule 4-1.16 of the Florida Rules of Professional Conduct delineates acceptable reasons for an attorney to withdraw from a case.
Required Withdrawal: A lawyer is required to withdraw if representation violates the law or any of the Rules of Professional Conduct, if he’s physically or mentally incapable of representing the client, or if the client discharges him. He must also withdraw if he believes or knows that the client’s action is criminal or fraudulent, unless the client agrees to disclose and rectify the fraud.
Permissible Withdrawal: Withdrawal is also allowed for many reasons so long as there is no harm done to the client’s interests – so an attorney who wants to withdraw on the eve of trial will likely need to state an extremely good reason for doing so. If the lawyer fundamentally disagrees with the client, if the client refuses to fulfill obligations to the lawyer after being warned that withdrawal will result otherwise, if the case becomes unreasonably burdensome financially, or if the client has made the case unreasonably difficult, withdrawal may also be permitted by the court.
If you feel that your former attorney’s withdrawal was unreasonable or unreasonably harmful to your case, you may be able to challenge his lien on those grounds.
Responsibilities After Withdrawal
When an attorney is discharged and/or allowed to withdraw from a case, he still maintains the duty to protect his former client’s interests through the transition to new counsel, including providing case file information to the new attorney. Though the option of retaining case files as security for unpaid fees is often available, it is limited by law, as will be discussed in Part 3. An attorney must also refund to his client any advance fee that hasn’t been earned.
If your former attorney has filed a lien against you, if you dispute the amount of the fees he claims you owe him, or if you are seeking new counsel for your case, Wagner, McLaughlin & Whittemore is experienced in holding other attorneys accountable for their actions. Contact us today to see how our expertise can help you.
Work with skilled Tampa attorney lien defense attorneys!
When you hire an attorney, you will normally sign a contract laying out the work you expect the attorney to accomplish and the method by which the attorney expects to be paid for his time. Whether you pay a retainer up front or sign a contingency fee agreement assigning a portion of your potential award to your attorney, few clients expect their attorneys to work for free. A typical agreement also spells out who should be responsible for the costs of filing fees, expert witnesses, and other expenses that are a normal part of your type of lawsuit. You may agree to pay some or all of those costs as the case progresses, or your attorney may agree to pay for everything until he obtains a money judgment in your favor. Each case is unique, and there are many different types of attorney contracts – but the language of yours could have a huge impact on your future relationship with your attorney.
Once the agreement is signed, most attorneys will get to work. Over the coming weeks and months, he and his staff will obtain and review reports, interview witnesses, schedule and attend formal depositions, and engage expert witnesses. He will build a case file, negotiate with the other party, and spend time answering your questions. He will prepare for trial, file motions on your behalf, and work toward achieving your objectives.
Only, things don’t always go according to plan.
Whether you become dissatisfied with your attorney’s representation or whether your attorney seeks to withdraw from your case for reasons of his own, you may be left in the position of needing to hire a new attorney to finish your case. When that happens, your original attorney may, in some but not all cases, still be entitled to payment for the time he spent on your case and for the expenses he has covered to investigate your claim. If you cannot or do not pay him according to the terms of your contract – or if you dispute the amount he is requesting – he has a few options to attempt to force payment.
The two favored options for a Florida attorney who wants to recover costs and fees owed him by a former client are retaining liens and charging liens. Retaining liens, basically, allow an attorney to hold your file – and all the evidence he’s collected while working on your case – as surety against your payment. Charging liens allow him to claim a portion of your future judgment in the case, once you receive it.
There are rules governing an attorney’s ability to file each type of lien, and conditions that must exist before a lien can be filed at all. Those rules and conditions will be explored in Part 2, and retaining and charging liens will be explored in Part 3.
Wagner, McLaughlin & Whittemore has the experience to defend our clients against unreasonable attorney liens and to help their cases get back on track. Contact us today for a free consultation.
