When providing funds to plaintiffs and placing a lien on a case, one of the most critical functions of a legal funding company is case tracking. This process, sometimes referred to as servicing or collections, involves monitoring investments from the time of funding until recovery, whether it’s a full return, partial loss, or complete loss. The primary goal of case tracking is to ensure that your investments are honored fully and promptly.
This blog will guide you through why confirming your liens is an essential first step in protecting your investments and maximizing returns, with actionable tips on how to do it effectively in today’s legal landscape.
Why Confirming Your Liens is Crucial
1. Attorneys Can Be Disorganized
Many attorneys, particularly in personal injury cases, may still rely on outdated filing systems, or worse, their memory. With the high volume of cases they manage, it’s easy for important details to be overlooked. One attorney shared how he became so frustrated during a negotiation that he threw his client’s file across the room and couldn’t account for what was lost. This scenario highlights how even minor oversights can jeopardize your lien and, by extension, your investment.
2. Multiple Funding Companies
Many plaintiffs work with multiple funding companies or lienholders. In some cases, attorneys may claim that they were unaware a particular funding transaction had been completed. They might argue that they didn’t receive a fully executed version of the funding contract, allowing them to claim plausible deniability. It’s not uncommon to hear, “How was I supposed to know the funding actually went through?”
These examples illustrate the importance of confirming your lien to protect your investment. Let’s explore the best ways to ensure your lien is secure.
Steps to Confirm Your Lien
1. Require Attorneys to Sign Off
A properly drafted contract should require that the plaintiff’s attorney signs and acknowledges the financing agreement. Many states have statutes mandating such acknowledgments, and even if your state doesn’t, it’s a best practice.
By signing the acknowledgment, the attorney confirms:
- They are aware of your lien.
- They will ensure that you are paid from any recovery before the plaintiff receives their portion.
Template: “I, the undersigned [Plaintiff’s attorney], will provide prompt written notice to [Funding Company] of any money recovery and will not disburse any money to [Plaintiff] without first paying [Funding Company] in full.”
2. Confirm the Lien After Attorney Signature
Even with an attorney’s acknowledgment, further confirmation is key. This additional step helps attorneys stay organized and ensures that no lien is forgotten. Here are three simple ways to confirm your lien, which should be completed shortly after funding.
Phone Confirmation:
- Call the attorney or their office to confirm they have the lien on file.
- Keep records of who you spoke with for future reference.
Sample Script: “Can you please confirm that you have this lien on [Plaintiff’s] file? May I get your name for the record?”
Email Confirmation:
- Send a digital copy of the fully executed agreement to the attorney, case manager, or paralegal, and ask them to acknowledge receipt.
Sample Request: “Please reply to confirm that [Your Funding Company’s] lien for [Plaintiff Name] is on file.”
Certified Mail:
- For larger cases or significant funding amounts, send the fully executed agreement via certified mail. This method provides proof of mailing and delivery. Instruct the law firm to confirm receipt by email and ensure proper filing.
Extra Credit: Going Above and Beyond
To guarantee that no lien is overlooked:
- Send the agreement to additional administrative staff or paralegals in the attorney’s office.
- Lawyers are busy and often rely on their team to manage such details, so this extra step can be vital in ensuring the lien is filed correctly.
Safeguard Your Lien, Protect Your Investment
Confirming your lien with law firms requires minimal effort but can significantly increase your chances of recovering your investment. By using these tips, you can mitigate potential losses and safeguard your interests in an increasingly complex legal environment.
