Ezel / Ethics Opinions / VTBAR

May successor counsel hold settlement funds claimed by a client's former lawyer?

Short answer Opinion 85-04 found no Code violation when successor counsel held the disputed funds after former counsel, a named payee on the settlement check, endorsed it on that condition. The committee did not decide whether the claimed lien was valid.
Bar
VTBAR
Issued
1985
Source
View Original PDF

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This page answers the general question as of 1985. Ask about yours and see what the current Vermont Rules of Professional Conduct say for your facts, with citations.

Disclaimer: Advisory only. Not binding precedent.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page as a PDF) is the authoritative source for any reliance.
View original ethics opinion (PDF)

Plain-English summary

The client's former lawyer claimed unpaid divorce fees and out-of-pocket costs from a personal injury case. A settlement check named both former and successor counsel as payees. Former counsel endorsed the check only after successor counsel agreed to hold an amount equal to the claim, which successor counsel placed in escrow while the client requested its release.

The committee said successor counsel did not violate the former Code by continuing to hold the funds after receiving notice of the claimed lien. It also said the Code would not be violated by releasing them to the client, though that might expose successor counsel to legal liability to former counsel. The committee declined to decide whether the lien was legally valid.

Currency note

This opinion was issued in 1985 under Vermont's former Code of Professional Responsibility. The Vermont Supreme Court's rules history states that the Rules of Professional Conduct applied to lawyer conduct after September 1, 1999. Later rule amendments or opinions may have changed the analysis. Treat this opinion as historical context and verify current rules before relying on it.

Common questions

Q: Did successor counsel violate the Code by keeping the claimed amount in escrow?

A: No. Former counsel was a payee on the check, endorsed it on the agreed condition, and gave successor counsel notice of the claimed lien.

Q: Did the committee decide that former counsel's lien was valid?

A: No. It treated lien validity as a question of law beyond its ethics opinion.

Q: What did the opinion say about paying the client instead?

A: It said that releasing the funds to the client would not itself violate the Code, but could create legal liability to former counsel.

Background and rules framework

The committee cited former EC 5-7 and DR 5-103(A)(1) on legally permissible attorney liens. It discussed Hurlbert v. Brigham on retaining and charging liens, while reserving the legal validity of the particular claim.

Citations and references

Rules of Professional Conduct:

  • Vermont Code of Professional Responsibility EC 5-7, DR 5-103(A)(1)

Cases:

  • Hurlbert v. Brigham, 56 Vt. 368 (1881), retaining and charging liens

Other opinions cited:

  • Vermont Professional Responsibility Committee Opinion 82-9, attorney lien on a client file

See also

Source

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