Can a lawyer holding settlement funds in trust refuse to pay a forwarding attorney by claiming a retaining lien?

Plain-English summary

An attorney held in his trust account the proceeds of a recovery in a litigated case. The amount was less than the fees claimed due to himself and a "forwarding attorney" combined, and indeed less than what the inquirer alone claimed, though more than what the clients apparently agreed they owed the forwarding attorney. The forwarding attorney had demanded payment of a portion of the funds, but the clients had not consented to applying the funds to either lawyer's fees, with an intimation that the consent was being withheld at the forwarding attorney's instance.

The committee declined to reach the first question, whether the forwarding attorney had any right to the trust funds, holding that it was a question of law involving the rights of a person other than the inquirer and therefore beyond the committee's jurisdiction. On the second question, whether the inquirer could refuse to disburse a portion of the funds while claiming a retaining lien over the entire amount, the committee said whether such a lien exists is also a question of law beyond its jurisdiction, but that if an attorney is entitled to a retaining lien, he may ethically exercise that right. It expressed regret that the limits on its jurisdiction precluded any further opinion.

Currency note

This opinion was issued in 1968, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. It applied the former Canons 11 (handling trust property) and 34 (division of fees). The safekeeping of client and third-party funds is now addressed by Rules 4-1.15 and 5-1.1. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific requirement mentioned here.

Common questions

Q: Does a forwarding attorney have a right to funds in another lawyer's trust account?

A: The committee declined to answer, holding that question to be one of law involving a third party's rights and therefore beyond its jurisdiction.

Q: Can a lawyer assert a retaining lien over trust-account funds?

A: The committee said whether a retaining lien exists is a question of law beyond its jurisdiction, but that if a lawyer is in fact entitled to a retaining lien, he may ethically exercise it.

Background and rules framework

The opinion applied the former Canon 11 on handling client trust property and Canon 34 on the division of fees, but turned largely on the committee's view that the disputed entitlements were questions of law outside its remit. Safekeeping of funds is now addressed by Rules 4-1.15 and 5-1.1 of the Rules Regulating The Florida Bar; the Model Rule analogue is Rule 1.15.

Citations and references

Rules of Professional Conduct:

• Canons 11 and 34 [Code of Professional Responsibility; trust funds now in Rules 4-1.15 and 5-1.1]

See also

No sibling opinions yet indexed.

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-68-37/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-68-37-1.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 68-37
August 22, 1968
Advisory ethics opinions are not binding.
Whether a retaining lien exists is a question of law. If an attorney is entitled to a retaining lien, he may ethically exercise that right. Whether a "forwarding attorney" has any rights to proceeds of litigation being held by another attorney in his trust account is a question of law.
Canons: 11, 34
Chairman MacDonald stated the opinion of the committee:
An attorney advises that he is holding in his trust account the proceeds of a recovery in a litigated case, which is less than the amount presently due himself and a "forwarding attorney" for fees; indeed, the amount in trust is less than the amount claimed to be due the inquirer, but more than that apparently agreed to be owed by the clients to the "forwarding attorney."
A demand has been made by the other attorney on the inquirer for payment of a portion of the funds in trust, but as yet no consent for application of the funds to the fees due either attorney has been received from the clients. There is an intimation that the withholding of this consent is at the instance of the "forwarding attorney."
We are asked whether the "forwarding attorney" has any right to the funds in the trust account. This is not only a question of law, but one involving the acts or rights of a person other than the inquirer. Accordingly, it is beyond our jurisdiction.
We are secondly asked whether there is any impropriety in the inquirer refusing to disburse a portion of the funds to the other attorney, the inquirer claiming a retaining lien upon the entire amount in his trust account.
Whether a retaining lien exists is a question of law and one beyond our jurisdiction. However, if an attorney is entitled to a retaining lien, he may ethically exercise that right. We regret that the limitations on our jurisdiction preclude us from expressing a further opinion.