State Bar of Nevada Ethics Opinion 53, April-18-2017

• Jurisdiction: Nevada
• Opinion Number: 53
• Date: 18 April 2017
• Subject Matter: Scope of Representation and Allocation of Authority Between Client and Lawyer; Confidentiality of Information; Conflict of Interest: Current Clients; Conflict of Interest: Current Clients: Specific Rules; Safekeeping Property

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STATE BAR OF NEVADA

STANDING COMMITTEE ON

ETHICS AND PROFESSIONAL RESPONSIBILITY

Formal Opinion No. 53

BACKGROUND

The Committee has received requests from several Nevada attorneys for an opinion on the

ethical implications of entering into a business relationship with other personal injury attorneys

and/or firms to purchase medical liens.

QUESTION PRESENTED

Is it ethical for an attorney who represents clients in personal injury cases to be involved in

the business of buying and selling medical liens for other attorneys’ personal injury clients?

ANSWER

No.

DISCUSSION

a. The Business of Medical Liens.

During the pendency of a personal injury case, clients often must obtain medical treatment

related to the injuries caused by the alleged tortfeasor. However, not all clients have sufficient

funds or personal insurance coverage to cover the costs of that treatment throughout the litigation

process. One way for those clients to obtain the necessary treatment is through the use of a medical

lien. Medical liens are contracts between the client, physician or other care provider, and the

attorney that promise payment from any recovery, regardless of source, to the care provider before

any recovery payment is made to the client. As a result, the care provider agrees to refrain from any

collection activities until the case is concluded, with the understanding that there is a risk that no

payment will ever be received. This risk comes at a cost to the client – the fees for the services

provided to a client pursuant to a medical lien generally are significantly higher than if billed to

insurance or for cash payment. Because the additional expense often is necessary for clients to

obtain the treatment they need, medical liens are used regularly in personal injury cases.

Many care providers, before agreeing to provide a medical service with the risk of not getting

paid, seek details about the case to evaluate the risk. They may ask for various information, such

as: accident reports; adverse insurance policy limits; the client’s insurance information, if any;

details regarding the client’s injuries and any preexisting issues. Further, once a case settles, the

practice of a competent attorney is to attempt to negotiate a discount of the lien.

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This generally

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State Bar of Nevada, Standing Committee on Ethics and Professional Responsibility, Formal Op. No. 42, June 24,

2009; In re Discipline of Laub, Order of Suspension, Case No. 36322 (Nev. June 9, 2002) (unpublished opinion).