Can a lawyer hold a client's papers and property as a retaining lien until unpaid fees are paid?

Plain-English summary

The Board considered the ethical propriety of a lawyer's assertion of a retaining lien to secure payment of fees and expenses. As the opinion describes it, a retaining lien (recognized in some but not all jurisdictions) is non-contractual, applies to a client's papers and other property coming into the attorney's hands professionally, and gives the attorney the right to retain (but not "foreclose" against) that property until the client pays the fees and expenses owed.

The opinion identifies three applicable rules: HRPC 1.8(i)(1), permitting a lawyer to "acquire a lien authorized by law to secure the lawyer's fee or expenses"; HRPC 1.16(d), requiring a lawyer on termination of representation to take reasonably practicable steps to protect the client's interests, such as surrendering papers and property the client is entitled to; and HRPC 1.15(d), requiring a lawyer to promptly deliver funds or property the client or a third person is entitled to receive, except as otherwise permitted by law or by agreement. The opinion notes that whether and when retaining liens may be recognized in Hawaii, and which papers and property a client is entitled to, are questions of law the Board does not decide.

The opinion concludes that, because the Board is charged with adopting advisory opinions interpreting the Hawaii Rules of Professional Conduct, it rules that until retaining liens are explicitly recognized by Hawaii law, a lawyer's assertion of a retaining lien against a client's or former client's papers and property would violate the spirit and intent of HRPC 1.16(d) in withdrawal cases and HRPC 1.15(d) in other cases, and hence would breach the lawyer's ethical obligations.

In practice

Under this opinion, as updated to the current rules, a Hawaii lawyer cannot hold a client's file or property hostage to unpaid fees by asserting a common-law retaining lien, because Hawaii law does not yet recognize such liens and the duties to surrender client property (HRPC 1.16(d) and 1.15(d)) control. The opinion holds that the fee-security path HRPC 1.8(i)(1) allows is limited to a lien "authorized by law," which the retaining lien is not in Hawaii. The opinion expressly leaves open, as questions of law, whether retaining liens might later be recognized and which materials a client is entitled to.

Common questions

Q: Can a Hawaii lawyer keep a client's file until the bill is paid?

A: The opinion concludes no; until Hawaii law recognizes retaining liens, withholding a client's papers and property to secure fees violates HRPC 1.16(d) and 1.15(d).

Q: Doesn't HRPC 1.8(i) let a lawyer take a lien for fees?

A: Per the opinion, HRPC 1.8(i)(1) permits only a lien "authorized by law," and a retaining lien is not authorized by Hawaii law, so it does not qualify.

Q: Did the Board decide whether retaining liens exist in Hawaii?

A: No. The opinion states that whether and when retaining liens may be recognized, and which property a client is entitled to, are questions of law the Board does not determine.

Background and rules framework

The opinion interprets HRPC 1.8(i)(1) (acquiring a lien authorized by law for fees), HRPC 1.16(d) (surrendering client papers and property on termination), and HRPC 1.15(d) (promptly delivering property the client is entitled to receive). These correspond to Model Rules 1.8(i), 1.16(d), and 1.15(d). The opinion treats the existence of a retaining lien in Hawaii as an undecided question of law.

Citations and references

Rules of Professional Conduct (Hawaii; cf. Model Rules):

• HRPC 1.8(i)(1) (lien authorized by law for fees) (cf. Model Rule 1.8(i))
• HRPC 1.16(d) (surrender of client papers and property on termination) (cf. Model Rule 1.16(d))
• HRPC 1.15(d) (prompt delivery of client property) (cf. Model Rule 1.15(d))

See also

• ABA Formal Op. 471: Surrendering Papers and Property to a Former Client
• Alabama Ethics Op. 1986-02: Attorney's Lien and Providing Copies of the Client File

Source

• Landing page: https://dbhawaii.org/legal-ethics-advice-for-hawaii-lawyers/
• Original PDF: https://dbhawaii.org/wp-content/uploads/FO_28.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.
Disciplinary Board of the Hawai#i Supreme Court
201 Merchant Street, Suite 1600
Honolulu, Hawai#i 96813
Telephone (808) 599-1909
www.odchawaii.com
Chairperson

Hon. Clifford L. Nakea (Ret.)
Vice Chairperson

Hon. Leslie A. Hayashi
Secretary

Nathan J. Sult, Esq.
Treasurer

Joy M . M iyasaki, Esq.
Filing Clerk

Board M embers
James L. Branham, Esq.
Gary M . Farkas, Ph.D., M BA
Diane D. Hastert, Esq.
Philip D. Hellreich, M .D.
Shelton G.W. Jim On, Esq.
Harrilynn K. Kame#enui, Esq.
Hon. Evelyn B. Lance (Ret.)
Philip H. Lowenthal, Esq.
Jeffrey P. M iller, Esq.
Carolene N. Kawano Neely, M .S.W., M .Ed.
Jeffrey S. Portnoy, Esq.
Irwin J. Schatz, M .D.
Judith A. Schevtchuk, Esq.
Asst. Chief Eugene Uemura, (Ret.), M A.Ed.

Faye F. Hee
Board Counsel

Bradley R. Tamm, Esq.

FORMAL OPINION NO. 28
Inquiry has been made concerning the ethical propriety of a
lawyer's assertion of a retaining lien to secure payment of his or
her legal fees and expenses. A retaining lien (recognized in some
but not all jurisdictions) is non-contractual, applies to a
client's papers and other property coming into an attorney's hands
professionally, and gives the attorney the right to retain them
(but not "foreclose" against them) until the attorney has received
payment of fees and expenses owed by the client to the attorney.
Three Disciplinary Rules are applicable.
HRPC 1.8(i)(1) states that an attorney may “acquire a lien
authorized by law to secure the lawyer’s fee or expenses.”
HRPC 1.16(d), applicable to an attorney's termination of
representation, requires an attorney “to take steps to the extent
reasonably practicable to protect a client’s interests, such as .
. . surrendering papers and property to which the client is
entitled. . . .”
HRPC 1.15(d), which is not limited to withdrawal situations,
says: “Except as stated in this Rule or otherwise permitted by law
or by agreement with the client, a lawyer shall promptly deliver to
the client or third person any funds or other property that the
client or third person is entitled to receive . . . .”
Questions of law are not to be determined by the Board. Those
questions include, among others, the questions whether and under
which circumstances retaining liens eventually may be recognized in
Hawai#i and which papers and other properties in any given case are
those to which the client is entitled.

The Disciplinary Board’s mission is to maintain the integrity of the legal profession
and protect the public from professional misconduct by attorneys.

The Board is, however, charged with the duty to adopt and
publish advisory opinions interpreting the Hawai#i Rules of
Professional Conduct.
It is the Board's ruling that, until such time as retaining
liens are explicitly recognized by Hawai#i law, a lawyer's assertion
of a retaining lien against papers and other properties of a client
or former client would violate the spirit and intent of HRPC
1.16(d) in withdrawal cases and HRPC 1.15(d) in other cases and,
hence, would constitute a breach of that lawyer's ethical
obligations under our Hawai#i Rules of Professional Conduct.
DATED:

Honolulu, Hawai#i, December 22, 1983
C. Frederick Schutte
Chairperson, Disciplinary Board

UPDATED:

Honolulu, Hawai#i, June 28, 2001
Carroll S. Taylor
Chairperson, Disciplinary Board

UPDATED:

Honolulu, Hawai#i, March 19, 2015

Hon. Clifford L. Nakea (Ret.)
Chairperson, Disciplinary Board