If a court-ordered attorney's fee award is reversed on appeal, must the lawyer who already received and applied it to the client's bill refund it?

Plain-English summary

In a separate-maintenance-and-support action, the trial court awarded client A attorney's fees, ordering opposing party B to pay a set sum to A through the office of A's attorney. B appealed but, for unexplained reasons and although an appeal was assumed to stay the award, paid the fees during the appeal. A directed her attorney to apply the money to her account under their fee contract; because the award did not cover the full balance, A herself later paid the remainder during the appeal. The fee award was then reversed on appeal. The inquiry asked whether A's attorney had to honor a repayment demand from B (or B's attorney), and whether the attorney had to honor a demand from A to repay B.

The committee reasoned that a stay only exempts a party from being compelled to obey an order on penalty of contempt; it does not bar a voluntary payment. When the funds were delivered and A directed that they satisfy her contract with the attorney, the funds became the attorney's property (absent a forfeiture statute, which did not apply here). Reversal of the fee award did not change A's underlying liability to pay her attorney, so A was not entitled to a refund. Citing Advisory Opinion 92-11, which held that a fee award is the property of the client and not the attorney, the committee drew the complement: reversal of a fee award renders the client, not the attorney, liable for repayment. The committee concluded the attorney need not pay B (the payment, though perhaps not required, violated no order), and that while A might be liable to repay B, A's attorney was no more obligated to pay A's debt than any other creditor of A.

Currency note

This opinion was issued in 1992, before the South Carolina Bar's adoption of the 2005 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 Treat this page as historical context, not current guidance.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.

Common questions

Q: If an attorney's fee award is reversed on appeal, does the lawyer have to refund the money?

A: The committee said no. Once the client directed the voluntarily paid funds to satisfy her fee contract, they became the attorney's property, and reversal left the client (not the attorney) liable for any repayment.

Q: Did the attorney have to hold the fee payment in trust pending the appeal?

A: The committee treated the funds as the attorney's property once the client directed them to her account under the fee contract, so it found no requirement to hold them in trust; it noted only a forfeiture statute (absent here) could change that.

Q: Could the opposing party who paid the fee recover it from the lawyer?

A: The committee said the lawyer need not repay the opposing party; the client might be liable to repay, but the attorney was no more obligated to pay the client's debt than any other creditor would be.

Background and rules framework

The opinion turned on property and contract principles rather than on a specific Rule of Professional Conduct. It built on Advisory Opinion 92-11, which held that a court-ordered fee award is the property of the client, not the attorney, and applied the complement to a reversed award. The committee distinguished the legal effect of an appeal stay (protection from compelled compliance) from a bar on voluntary payment.

Citations and references

Other opinions cited:

• SC Bar Advisory Opinion 92-11: a court-ordered attorney's fee award is the property of the client, not the attorney.

See also

• SC Bar Ethics Op. 02-07: Who Gets a Flat-Fee Refund, Client or Payor
• SC Bar Ethics Op. 01-02: A Doctor's Claimed Lien on a Settlement

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-92-15/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 92-15

A was represented in an action for separate maintenance and support. The trial court granted certain relief to A and awarded A attorney's fees. The court's order specifically provided for B to pay, to A through the office of A's attorney, attorney's fees in a specified sum.

B appealed the order of the trial court. However, during the pendency of the appeal for reasons which are unexplained, B paid the attorney's fees as required by the order. For the purpose of this opinion you may assume that an award of attorney's fees is stayed by an appeal of the order. A instructed her attorney to apply the monies received from B to her account in accordance with their fee contract. The attorney fee award did not pay the entire balance of the account; however, during the pendency of the appeal, A subsequently paid the balance of her account with her attorney according to their fee contract.

The attorney's fee award was subsequently reversed on appeal.

Questions:

1. If B or his attorney demands repayment from A's attorney, must A's attorney honor the demand?
2. If A demands that her attorney repay B the monies he paid to her through the office of her attorney, must the attorney honor the demand?

Summary:
A's attorney need not repay the money either to the opposing party or to A because the money was voluntarily paid by A as a fee, and there was no requirement to hold the funds in trust.

Opinion:
The first question deals with the significance of an appeal staying an order to pay attorneys fees. A stay is simply a legal provision which exempts a party from being required to obey a court order on penalty of contempt of court. A stay is nothing more; it does not prohibit a voluntary payment of funds.

When the funds were delivered to A's attorney and A directed that they be used to satisfy the A's contract with her attorney, the funds became the property of the attorney. In some criminal cases, a forfeiture statute could change this, but there is no forfeiture statute in this situation.

The reversal of the attorney's fee award on appeal did not alter the liability of A to pay her attorney. Thus, A is clearly not entitled to a refund.

In Advisory Opinion 92-11, it was stated that a fee award is the property of the client and not the attorney. Thus the complement is also true, that a reversal of an attorney's fee award will render the client liable for repayment, but not the attorney.

The payment by B while represented by an attorney may not have been required, but it was not made in violation of any order. While A may be liable to repay B, A's attorney is no more required to pay A's debt than is any other creditor of A.