If a client tells a lawyer not to pay over trust funds the client had set aside for a third party, what must the lawyer do with the disputed money?

Plain-English summary

A lawyer held fees a client had given him originally to pay fees owing to a Canadian lawyer. The client then instructed the lawyer not to pay those fees. The lawyer asked what his obligations were with respect to the funds.

The committee was of the opinion that the answer turned on a legal question regarding ownership of the funds. If the funds belonged to the client, the committee said the lawyer could not disburse them until the dispute between the client and the Canadian lawyer was resolved. If the funds no longer belonged to the client, the committee said the answer would depend on agency law, on which it could render no opinion and for which, in any event, it lacked sufficient facts.

Currency note

This opinion was issued in 1991, before the 2006 revisions to the Washington 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 Treat this page as historical context, not current guidance.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: Can a lawyer release trust funds when the client and a third party both claim them?

A: The committee was of the opinion that if the funds belonged to the client, the lawyer could not disburse them until the dispute between the client and the third party (here, a Canadian lawyer) was resolved.

Q: What if the funds no longer belong to the client?

A: The committee said that question would depend on agency law, on which it could render no opinion and for which it did not have sufficient facts.

Background and rules framework

The opinion addressed the safekeeping of disputed property held in trust under the then-current RPC 1.14, Washington's rule on safekeeping property, which corresponds to ABA Model Rule 1.15. (Washington renumbered its rules in the 2006 revisions; the 1991 RPC 1.14 covered the subject now in Model Rule 1.15.) The committee tied the lawyer's duty not to disburse to whether the funds belonged to the client and to the existence of a competing claim.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.15 (safekeeping property; disputed funds) / Washington RPC 1.14 as it stood in 1991

See also

• AL Ethics Op. 1990-48: Interpleading Disputed Funds
• CBA Formal Op. 118: Disputed Fee After Withdrawal

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=508

Original opinion text

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

Advisory Opinion: 1428
Year Issued: 1991
RPC(s): RPC 1.14
Subject: Dispute regarding ownership of funds in trust

The Committee reviewed your inquiry concerning your obligations where you hold fees given to you by a client originally to pay fees owing to a Canadian lawyer, and now your client has instructed you not to pay them. The Committee is of the opinion that the answer to your inquiry turns on a legal question regarding ownership of the funds. The Committee is of the opinion if they belong to the client, the lawyer may not disburse them until the dispute is resolved between the client and the Canadian lawyer. Further, if the funds do not now belong to the client, the answer would be dependent upon agency law on which the Committee could render no opinion, and which, in any case, the Committee would not have sufficient facts to render any opinion.