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FMG Law Blog Line

California Lawyers Who Ignore Lienholders Do So At Their (Disciplinary) Peril

Posted on: October 20th, 2020

By: Greg Fayard

In personal injury law, California lawyers regularly must deal with medical liens. For example, lienholders have certain rights to proceeds from a settled case and expect to be paid. In the past, if a California lawyer ignored or mishandled a medical lien on personal injury proceeds, the lienholder could pursue the attorney for the amount owed.

But now, under Rule 1.15 of the Rules of Professional Conduct, California lawyers can now be disciplined for ignoring or mishandling lienholder rights. That is, money from a California lawyer’s client trust account can only be released to the client or a lienholder if there is NO dispute as to who gets what.

Until the dispute over the personal injury funds is resolved, California lawyers have to keep the money in their client trust account. If a lawyer does not do this, and disburses funds that were supposed to go to a lienholder, the lawyer can now be disciplined by the State Bar. This means a California lawyer who is not careful with handling medical liens now is subject to both civil and disciplinary exposure.

If you have any questions or would like more information, please contact Greg Fayard at [email protected], or any other member of our Lawyers Professional Liability Practice Group, a list of which can be found at www.fmglaw.com.

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