Chaos to clarity: Attorney lien statute bill passes General Assembly

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A bill that would provide clarity to the statute governing liens for attorney fees is heading to the desk of Gov. Glenn Youngkin after passing the Senate and the House of Delegates unanimously.

Senate Bill 817, sponsored by Sen. Scott Surovell, D-Fairfax County, would amend Virginia Code § 54.1-3932, which governs liens for attorney fees. The bill would spell out the process of how attorneys can assert a lien, provide a 45-day period through which an attorney has to provide notice of the charging lien after certain triggering events and add a new paragraph stating the validity and amount of the lien shall be determined by a court without a jury.

The bill also clarifies that the charging lien arises upon the client contracting the attorney for services and that, in divorce cases, the court may not adjudicate the lien until final judgment is rendered.

Surovell told the Senate Judiciary Civil Law Subcommittee on Jan. 23 that amending the lien statute “is a project I have been working on for about three years.”

“Some of my colleagues came to me and said that the wording in this existing statute was just a complete nightmare and archaic and old,” Surovell told the subcommittee, while noting the statute was originally drafted in 1904 and last amended in 2001.

Committee history

The proposal faced its lengthiest review by the legislature during the Jan. 23 Senate Judiciary Civil Law Subcommittee meeting.

Surovell proposed a pair of line amendments at the meeting, the first of which clarified that attorneys are not required to withdraw as an attorney to assert a lien. The amendment prompted questions from subcommittee chair Sen. Chap Petersen, D-Fairfax County.

“If you assert a lien, aren’t you at that point adversarial with your client?” Petersen asked.

Sen. Richard Stuart, R-Montross, however, wanted to know why it would be necessary to include that language if an attorney were not at odds with her client. After some debate, the first line amendment died for lack of motion.

The second line amendment created a provision tasking the Office of the Executive Secretary of the Supreme Court of Virginia to “promulgate a form to be filed with the clerk of the circuit court.”

“I’ve had conflicts with the clerk about accepting a lien,” Surovell said. “I think having clarity about the right way to do it would help avoid a lot of conflicts with clerks across the state.”

That portion — subpart two — was accepted with minimal debate. The bill was recommended for reporting by a voice vote of the subcommittee soon after.

Two days later, Petersen introduced the bill before the Senate Judiciary Committee, which adopted the line amendment via voice vote. Committee co-chair Sen. R. Creigh Deeds, D-Hot Springs, sought clarity on the 45-day timeframe portion of the bill.

“The bottom line is this bill, to use a well-worn cliché, puts some guardrails around attorney liens that if you work on the case as an attorney and you either terminate the relationship or are terminated, then you have to give notice within 45 days of your lien,” Petersen said. “The bottom line is I think this is a good piece of legislation that will add some clarity to what is a very, very chaotic piece of the code right now.”

The committee voted unanimously to report the bill.

SB 817 was passed by the Senate in a 39-0 unanimous bloc vote on Jan. 31.

The House of Delegates began its review of the bill with a hearing before the House Courts of Justice Subcommittee #2 on Feb. 13. In presenting the bill to the subcommittee, Surovell said he “is not aware of any opposition” to the bill.

Surovell did not face any questions from the members of the subcommittee, who unanimously recommended reporting. The bill was later reported from the House Courts of Justice Committee unanimously on Feb. 20 in a vote on a bloc of uncontested bills.

The full House of Delegates passed SB 817 in a 96-0 unanimous vote on a bloc of uncontested bills on Feb. 23.

Boyd-Graves Conference

SB 817 was a recommendation of the Boyd-Graves Conference, a nonpartisan group of judges, law professors and lawyers which reviews statutory questions that arise and looks for ways to improve the law.

The conference established a committee after being approached by the Virginia Family Law Coalition, with questions sent from the coalition and Surovell on how to clarify the statute.

“I sent the Boyd-Graves commission 10 different questions that I thought we need to get answered to clarify this statute, and they came back with this specific draft,” Surovell said in the Jan. 23 Civil Law Subcommittee meeting.

The committee was chaired by Reeves Mahoney, managing partner of Mahoney Richmond Thurston, who has practiced family law for more than 40 years. A variety of judges and attorneys joined Mahoney on the nine-member committee.

“We analyzed the statute at the initiation and adopted as our emphasis clarifying certain portions of the statute to allow it to be administered more efficiently,” Mahoney said.

Of the debated changes, Mahoney specifically noted there was a great deal of discussion of whether a jury trial should be permitted for solving a lien or if it should be handled by a judge.

“Ultimately, we decided that it would be determined by a judge because it is in the interest of folks at the end of often bitterly fought litigation to expeditiously resolve any outstanding attorney fees issue,” Mahoney said.

In the end, the committee recommended six key modifications to Va. Code § 54.1-3932 — which mirror those changes proposed in SB 817 — and presented a redlined version of the legislation with the changes.

Mahoney said it was an “enjoyable experience” to chair what he dubbed “an interesting committee to be on.”

Effects

If the bill is signed into law by Youngkin, Mahoney anticipates attorneys will find the section of the code “easier to enforce.”

“I think that the current statute has certain ambiguities in it that made it difficult to enforce, and by tightening up the statute, it is going to be easier to enforce,” Mahoney said.

The lawyers who primarily use this statute and who are most likely to feel the effects of this bill are those who practice personal injury and family law, Mahoney noted.

“You can have any commercial litigator that’s litigating a breach of contract, that this statute is available for asserting a lien for fees,” he said. “But given what existed and given what’s being recommended, I think that the statute is going to be more easily applied.”

The Virginia Family Law Coalition supports the bill, with coalition chair Daniel L. Gray providing public comment during the Feb. 13 subcommittee meeting.

“There’s a lot of confusion in the family law bar about how to properly assert a lien, and as [Sen. Surovell] explained, this clarifies the law,” Gray said before the subcommittee.

Gray added that the bill, if passed, would also allow attorneys to take on representation of economically disadvantaged clients and assert a lien against the recovery.

“We think that this will permit more representation of spouses who are economically disadvantaged, so we support the bill,” Gray concluded before the subcommittee.

The bill is also included on the Virginia Bar Association’s legislative agenda for 2023, as it was recommended by the Boyd-Graves Conference.