Attorney Lien (Mass Tort)

An attorney lien in the mass tort context is the statutory or common-law right of a plaintiff's attorney to be paid contingency fees and reimbursed advanced case costs directly out of the client's settlement or verdict proceeds before any funds are disbursed to the client, arising under state law that varies in form between a charging lien against the specific recovery and a broader retaining lien over client files and property in the attorney's possession. In mass tort settlements administered through a claims facility, attorney liens are typically satisfied automatically as part of the distribution waterfall, with the fee percentage and cost reimbursement calculated and deducted before the net amount reaches the claimant, and disputes over fee entitlement — most commonly arising from referral arrangements, mid-case attorney substitutions, or co-counsel splits — are resolved separately from the underlying settlement distribution, often through interpleader or a dedicated fee dispute process. Because the attorney lien attaches to the specific recovery and generally has priority over unsecured claims against the same proceeds, it interacts directly with any litigation financing arrangement the attorney or client has entered, and funding agreements must expressly address the relative priority between the funder's repayment right and the attorney's fee lien.

Priority between attorney liens and funder repayment is a foundational, deal-specific term that funders must negotiate explicitly rather than assume, since state lien law generally favors the attorney's charging lien and does not automatically subordinate it to a financing arrangement entered into later.

Funders providing law firm-level financing structure their facilities to sit alongside, rather than in conflict with, the firm's own fee lien, typically by financing the firm's operating capital or fee receivable directly rather than attempting to assert a competing claim against individual client settlement proceeds.