Face it. ERISA liens are no picnic. And resolving them isn’t getting any easier. In fact, it’s become more complex, especially with decisions like McCutchen vs. U.S. Airways. Cases like these have forever changed the way ERISA seeks reimbursement from plaintiffs who later receive a third-party settlement. So what do you do? If you’re an experienced plaintiff attorney, it’s been ingrained that resolving these liens yourself at no charge is simply part of your job and something you should do. However, you may be rethinking that approach. And if you’re a newer plaintiff attorney, you may already have decided that you are not going to deal with them. Regardless of who you are, experienced or newer trial attorney, the stakes are higher and mistakes are easier to make than ever. Here’s what you should know.
Your First Mistake
When attempting to resolve ERISA liens, one of the most common mistakes is not being honest with yourself. Ask yourself if you really care what your client pays back to his or her ERISA plan, or what their net settlement is. If your answer is “yes” on the outside, but you really don’t want to make a federal case out of it, answer the question “no.” Sure, you could press on for seven years like McCutchen’s team did and take it all the way to the Supreme Court, but would it be worth it for you or for your client? If not, make your deal, convince your client what a great job you did and MOVE ON.
Your Second Mistake
Another common mistake, and this is a big one, is to proceed WITHOUT the ERISA Plan Document (EPD). The EPD is supposed to contain specific legal language that allows the ERISA Plan to seek full reimbursement from any settlement a member receives as a result of a third-party injury. In the McCutchen vs. U.S. Airways Supreme Court ruling, the Supreme Court cites this language from the U.S. Airways Summary Plan Document (SPD).
However, the SPD is no replacement for the EPD itself, which the Supreme Court ruled reigns supreme.
It’s important to note that if the aforementioned U.S. Airways reimbursement language hadn’t also been in the ERISA plan document, as sometimes it is not, this ruling would probably not have held. This is precisely why it is important to only proceed with the EPD. If you choose to proceed without the EPD then you really do not know if the ERISA Plan has the legal horsepower to exert a lien on your client’s settlement. The moral of the story? Don’t be a fool and proceed without the ERISA Plan Document. If you STILL choose to proceed without the EPD, ask yourself again if you really care what your client pays back to their ERISA plan or what their net settlement is, and this time answer truthfully.
Your Third Mistake
The third, and biggest mistake you can make, is to do it yourself. As new rulings make resolving lien cases more complex, it’s easier for mistakes to crop up. These mistakes can greatly cost your client. Why take that chance? Instead, make sure your retainer agreement has a provision that allows you to hire outside sources. With proper outsourcing, outside legal teams can make arguments that plaintiff’s counsel may be constrained to make. Better yet, when you decide to outsource, take advantage of resolution services for ERISA liens from The PLAINTIFF’S MSA AND LIEN SOLUTION.
Our lien team at Precision Resolution will put your client in the best possible position to obtain a great result from the resolution of their ERISA Plan lien. Our team is full of relentless lien hitmen. Since 2011, we have put millions of dollars back into plaintiff’s pockets. Specifically, through relentlessly and successfully challenging, reducing and eliminating lien claims. Not to mention, we have also significantly reduced attorney exposure to complaints or claims stemming from lien issues. With a team like this there’s no need to go it alone, or take risks. Put our team to work for you and your clients now. Outsource your case to us here.