Attorneys’ fee liens, commonly referred to as “charging liens,” pose a difficult problem for defendants.  Increasingly, plaintiffs are represented by multiple attorneys due to plaintiffs switching attorneys or attorney referrals.  This is particularly true in product liability cases where it is typical for the original plaintiff’s attorney to refer the case to an attorney specializing in product liability.  Sometimes former plaintiff’s attorneys file a formal notice of lien in the lawsuit.  However, other times the former plaintiff’s attorney does not file a formal lien notice with the court.  When a settlement is reached it is typical for the defendant to require the plaintiff to resolve all liens, including any attorney charging liens, as a condition of the settlement.  However, if the plaintiff and current plaintiff’s attorney fail to resolve a charging lien, then the former attorney claiming a charging lien may seek to collect from defendant either in the original action or in a separate action.

 Under Florida law, a former attorney’s charging lien is enforceable against a defendant.  Sinclair, Louis, Siegel, Heath, Nussbaum & Zavertnik, P.A. v. Baucom, 428 So. 2d 1383, 1385 (Fla. 1983).  When a defendant has notice of a charging lien before settlement of the case, the defendant may be held liable to the former plaintiff’s attorney.  The Florida Supreme Court has held that “there are no requirements for perfecting a charging lien beyond timely notice.”  Id.  Florida courts have found that “to give timely notice of a charging lien an attorney should either file a notice of lien or otherwise pursue the lien in the original action.”  Daniel Mones, P.A. v. Smith, 486 So. 2d 559, 561 (Fla. 1986).  While courts have not defined what constitutes “pursuit” of the lien, the former attorney is probably not required to file a formal notice of lien with the Court to perfect the charging lien.  Any notice of the charging lien, regardless of form, at any stage of the lawsuit, may be sufficient to hold a defendant liable for the charging lien. 

 Because of the risk that charging liens pose to defendants, it is important that defendants identify any potential charging liens.  Defendants should include an indemnification provision in the settlement agreement that requires the plaintiff to indemnify the defendant against any charging liens.  However, this provision often provides limited protection, because the plaintiff has exhausted the settlement money and lacks other assets.  Florida Bar Rules prevent defendants from including indemnity provisions in settlement agreements that would require the settling plaintiff’s attorney to indemnify the defendant should a lienholder assert a claim. Therefore, when significant settlement sums are involved, a defendant should take steps to ensure that the charging liens are resolved as part of the settlement reached with the settling plaintiff’s attorney.  For example, a defendant can refuse to disburse the settlement funds until the plaintiff proves that any charging liens have been resolved.  By taking steps to ensure that plaintiff’s and settling plaintiffs’ attorneys comply with their duties to resolve any liens, defendants can minimize their exposure to charging liens.