Articles Tagged with N.J.S.A. 2A:13-5

• Attorneys have common law and statutory security interests in the proceeds of recoveries of their clients, generally referred to as charging liens.

• A statutory lien is created when a lawyer files a pleading with an affirmative claim for recovery and may be enforced by filing a petition in the underlying action.

• Clients have an interest in the assertion of an attorney charging lien and must be notified of their right to have the amount of the fee determined by arbitration.

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Attorneys that provide services to clients with that yields a financial recovery to the client will typically have a security interest in that recovery to secure their fee.  The lien may be statutory or, in some cases, the attorney may have a lien that is enforceable in equity.  These two types of liens, statutory and equitable, have significant differences, but both types of liens provide the lawyer with a security interest in the proceeds of the case.

In this article, we will take a look at some of the mechanics of asserting and enforcing a lien.  In a subsequent post, we will examine the manner in which courts have allocated competing claims for fees.

The Attorney Charging Lien

A lien is more than just a claim for fees.  It is a secured interest in the recovery that a client achieves – through the lawyer’s efforts, of course — for the satisfaction of the debt.  It may be asserted over all of the recovery and, therefore, even against the client.  As a practical matter, liens are asserted when a lawyer is replaced or in rare instances when a client fires the lawyer in an attempt to avoid paying a fee. Continue reading