Case settled for $500k+. There are attorneys fees, liens, and costs to resolve but if ALL items are paid in FULL, there is still more than $200k of the settlement funds unencumbered. Plaintiff wants to get paid NOW for all unencumbered value and receive an additional disbursement upon the resolution of all liens and costs for whatever is saved on those liens and costs after adjustment/resolution. Can the plaintiffs attorney be subject to discipline for refusing to do multiple disbursements?

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No, they can’t. It is standard to not disburse anything until all liens are resolved, especially if they are of the Medicare/ERISA variety. Some firms can do “hold backs” where they will disburse some money and then hold back certain funds to cover liens, and then disburse anything left over to the client. However, you certainly won’t be disciplined for not doing this

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You have no obligation to disburse before all liens are taken care of. It’s as simple as that. If you want to do this, then the firm takes on the risk in the event a lien is higher than anticipated, or there is some sort of dispute with a lienholder.

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If you know what the ceiling is on the lien, and it’s going to take time to finalize a reduction, hold that amount in trust and pay your client the balance now. You probably won’t be disciplined for not doing this but it keeps your client happy.

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Plaintiff’s attorney says they only ever disburse to Plaintiff after all liens are resolved, no exceptions. Plaintiff believes that any amounts which are not potentially encumbered by liens or other debt should be disbursed promptly, and that a second disbursement can be made after resolution of liens. Attorney will not do multiple disbursements. What is the standard practice in the industry?

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I do multiple just to keep clients happy, when they don’t get their $ soon after they know you have the check they get a bad taste in their mouth and less likely to leave a good review.

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Yikes, I would pretty much never do this (disburse anything before liens resolve) and that could just be because I’m very uptight (read: anxious) about money matters. One thing I have done in a similar situation where the client simply wasn’t letting up is get them a litigation loan. The funding company we work with has a period of 30 days where all you owe is the $350 fee, no interest. And that was palatable to my client. But yeah in my state I think either way you choose to operate (refuse to disburse or disburse) is ethically allowed. I just couldn’t tolerate settling up twice

The first disbursement wouldn’t really be settling up, it’s just paying out unencumbered funds.

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