What must Connecticut successor counsel do with settlement funds subject to a discharged lawyer's disputed charging lien?
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This page answers the general question as of 2016. Ask about yours and see what the current Connecticut Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
A former lawyer asserted a charging lien against settlement proceeds obtained after successor counsel refiled the client's employment case. The client was considering a malpractice claim based on the former lawyer's discovery conduct and its alleged effect on the settlement value.
Rule 1.15(f) requires a lawyer holding property in which multiple people claim interests to keep the disputed property separate until the claims are resolved. The Committee treats a former lawyer's charging lien as a legal interest protected by that rule. Successor counsel therefore must segregate the amount subject to the competing claims but promptly may distribute portions whose ownership is undisputed.
Successor counsel may not decide the amount of the former lawyer's entitlement, the fee's reasonableness, or whether the malpractice claim offsets it. The opinion leaves resolution to the interested parties or an appropriate proceeding and notes that the Rule's commentary identifies a court action as one available mechanism.
In practice
Under this opinion, notice of a charging lien requires successor counsel to protect only the genuinely disputed portion of the recovery. Rule 1.15(f) simultaneously requires prompt distribution of the balance whose ownership can be identified without a competing claim.
Common questions
Q: Must successor counsel protect the former lawyer's claimed fee?
A: Yes. A charging lien is a legal interest covered by Rule 1.15(f), so the claimed portion must be segregated and safeguarded.
Q: May the client receive the undisputed settlement proceeds?
A: Yes. The Rule requires prompt distribution of portions for which there are no competing interests.
Q: May successor counsel decide whether the former lawyer's fee is reasonable?
A: No. The opinion says the lawyer holding the funds may not arbitrate the dispute unilaterally.
Q: May successor counsel offset the client's malpractice claim against the lien?
A: No. Successor counsel may not make that unilateral determination.
Background and rules framework
Rule 1.15(f) requires segregation of property subject to competing interests and prompt distribution of undisputed portions. Its commentary bars the lawyer holding funds from assuming the role of arbitrator between the client and a third party.
Citations and references
Connecticut Rules of Professional Conduct:
- Rule 1.15(f) and Official Commentary
Other opinions cited:
- Connecticut Informal Opinion 02-02, duty to protect discharged counsel's fees
See also
- RI Ethics Op. 91-53: Disputed fee funds held in escrow
- RI Ethics Op. 92-52: Prior lawyer's disputed lien
- Arizona Ethics Op. 19-0004/0005/0007: Disputed health-care lien
Source
- Landing page: Connecticut Bar Association Informal Ethics Opinions
- Original PDF: Informal Opinion 16-01
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