What should a lawyer do when a client refuses to accept settlement funds held in the lawyer's trust account?

Plain-English summary

The inquiry concerned a client who, after a mediation in which he signed the lawyer's accounting as modified at his request, refused to accept the settlement check for his share of the proceeds, citing unspecified problems with the accounting, then stopped responding and did not sign the insurer's release. The lawyer had already deposited the insurance check into the trust account.

The committee concluded that the funds should be held by the law firm in an interest-bearing account in accordance with RPC 1.14 until the disbursement issue is resolved. It noted that the committee does not provide legal advice, but called the lawyer's attention to potential remedies through the court process, such as the attorney lien statute or interpleader. The committee added that the Rules of Professional Conduct do not require the lawyer to do anything further to secure the client's signature on the release proposed by the insurance company.

Currency note

This opinion was issued in 1999, before the Washington State Bar Association's adoption of the 2006 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here. Washington's trust-account and property-safekeeping rule was numbered RPC 1.14 at the time of this opinion and corresponds to ABA Model Rule 1.15; the 2006 revisions renumbered and revised it, so verify the current rule before relying on it.

Common questions

Q: What should a lawyer do with settlement funds a client refuses to accept?

A: The committee concluded the funds should be held in an interest-bearing account under RPC 1.14 until the disbursement issue is resolved.

Q: Does the lawyer have to keep trying to get the client to sign the release?

A: No. The committee said the Rules of Professional Conduct do not require the lawyer to do anything further to secure the client's signature on the insurer's release.

Q: What options did the committee mention for resolving the dispute?

A: Without giving legal advice, the committee called attention to potential court-process remedies, such as the attorney lien statute or interpleader.

Background and rules framework

The opinion applied Washington RPC 1.14 (identification and safekeeping of client property and funds), which corresponds to ABA Model Rule 1.15. The committee made the holding of disputed funds in an interest-bearing trust account the lawyer's required course until the disbursement dispute is resolved, and treated court-process remedies as outside the scope of an ethics opinion.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.15 (safekeeping property); Washington RPC 1.14

Statutes:

• Washington attorney lien statute and interpleader (identified by the committee as potential court-process remedies, without citation)

See also

• WSBA Ethics Op. 1029: Trust Funds, Unreachable Clients
• WSBA Ethics Op. 1166: Taking Fees From a Missing Client
• WSBA Ethics Op. 1128: Unclaimed Trust Funds

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1045

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Advisory Opinion: 1852
Year Issued: 1999
RPC(s): RPC 1.14
Subject: Client refuses to accept settlement check after funds deposited in lawyer's trust account

I have been instructed by the Rules of Professional Conduct Committee to respond to your ethics inquiry #1852 concerning a client that refuses to accept a settlement check. [The lawyer represented a client in a tort case. After a mediation in which the client signed the lawyer's accounting as modified at the client's request, the lawyer received a check from the insurance company and deposited it into his trust account. The client refused to accept the check for his share of the settlement proceeds ($98,945.47), stating that he had unspecified problems with the lawyer's accounting. The client then ceased responding to the lawyer's inquiries, and has not signed the insurance company's release.]

The committee has reviewed your inquiry and determined the following:

The $98,945.57 should be held by the law firm in an interest bearing account in accordance with RPC 1.14 until the disbursement issue is resolved. The committee does not provide legal advice. However, we call your attention to potential remedies through the court process, such as the attorney lien statute or interpleader options. The Rules of Professional Conduct do not require you to do anything further to secure your client’s signature on the release proposed by the Insurance Company.