Who receives unused advance fees when a client and the payors both claim the refund?

Plain-English summary

A client sought return of unused advance fees after her representation ended. Relatives of her husband, who supplied the payment, also claimed the refund.

The answer forbids paying either claimant while both claim the money. The lawyer may distribute it as they jointly authorize after agreement and may facilitate communication, but may not represent either in reaching agreement. If no agreement follows within a reasonable time, the opinion directs interpleader and advance notice that its costs may reduce the refund.

Currency note

This opinion was issued in 1996, before Missouri’s 2007 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context and verify current rules before relying on it. The official page says its Rule 4-1.15 analysis predates the amendments effective July 1, 2013 and July 1, 2016.

Common questions

Q: May the lawyer simply refund the client?

A: No. The opinion says neither claimant may receive payment while both assert an interest.

Q: What happens if the claimants cannot agree?

A: After a reasonable time, the lawyer must file an interpleader action and notify them in advance of that step and its possible costs.

Background and rules framework

The answer forbids paying either claimant while both claim the money. The lawyer may distribute it as they jointly authorize after agreement and may facilitate communication, but may not represent either in reaching agreement. If no agreement follows within a reasonable time, the opinion directs interpleader and advance notice that its costs may reduce the refund.

Citations and references

Rules of Professional Conduct:

• Missouri Rule 4-1.15

See also

• Missouri Informal Op. 960158: Unclaimed Trust Funds

Source

• Landing page: https://mo-legal-ethics.org/informal-opinion/960125/

Original opinion text

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

Reference Note: Effective July 1, 2016, subdivision 4–1.15(f) of Rule 4 was repealed and a new subdivision 4–1.15(f) adopted in lieu thereof. This opinion is based on Rule 4–1.15 in effect prior to that date.

Reference Note: Rule 4–1.15 was amended, effective July 1, 2013. This opinion is based on the rule in effect prior to that date. Please see the July 1, 2013 version of Rule 4–1.15.

QUESTION: Attorney was hired by a woman to represent her in a modification action. The woman´s current husband also signed the contract with Attorney. The woman and her husband obtained the advance fee payment from her husband´s relatives. The representation is over. The client has asked that the unused funds be refunded to her. The relatives have requested that the unused funds be refunded to them. ANSWER: Attorney may not refund the fee to Attorney´s client or her in-laws as long as both are claiming an interest in those funds. Attorney should notify both that Attorney can pay out the funds in the manner they jointly authorize if they reach an agreement. Attorney may not represent either of them in the process of reaching an agreement, but Attorney may facilitate communications. If they do not reach an agreement within a reasonable time, Attorney must file an interpleader action regarding the funds. Attorney should notify Attorney´s client and her in-laws of Attorney´s intention to do this in advance and of the possibility that the costs of the interpleader action will diminish the eventual refund.