Can a lawyer pay personal injury settlement funds directly to the client when there are known unpaid medical bills or liens?

Plain-English summary

The inquiry asked whether a lawyer who received personal injury settlement monies may release the funds directly to the client when the lawyer was aware of substantial medical expenses, absent any guarantee of payment to creditors or medical liens.

The committee stated that, while it does not give legal advice regarding pending matters, the inquiring lawyer's reference to and reliance upon RPC 1.14(b)(4) and Formal Opinion 185 are well founded. It expressed no opinion about possible liability under subrogation or other legal proceedings.

Currency note

This opinion was issued in 1999, before the Washington State Bar Association's adoption of the 2006 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 Treat this page as historical context, not current guidance.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. In the 2006 revisions Washington renumbered its safekeeping-of-property rule (the former RPC 1.14) to RPC 1.15A, tracking ABA Model Rule 1.15, so verify the current rule and citation before relying on it.

Common questions

Q: Can a lawyer hand settlement money straight to the client despite known medical bills?

A: The committee did not resolve the question as a matter of legal liability, but it said reliance on RPC 1.14(b)(4) and Formal Opinion 185 was well founded.

Q: Did the committee address subrogation or lien liability?

A: No. The committee expressly expressed no opinion about possible liability under subrogation or other legal proceedings.

Background and rules framework

The opinion pointed to Washington RPC 1.14(b)(4), the safekeeping-of-property rule then numbered 1.14 in Washington and corresponding to ABA Model Rule 1.15, which governs a lawyer's handling of funds in which a third party may claim an interest. The committee treated the lawyer's reliance on that rule and on Formal Opinion 185 as well founded, while leaving the underlying legal questions of subrogation and lien liability to other authorities.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.15 (safekeeping property); Washington RPC 1.14(b)(4)

Other opinions cited:

• WSBA Formal Opinion 185 (handling settlement funds subject to third-party claims)

See also

• WA Ethics Op. 1355: Hold-Harmless for Medical Bills From Client Funds
• WA Ethics Op. 1472: Guarantee of Payment From a Settlement
• WA Ethics Op. 1120: Returning a Signed Release

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1091

Original opinion text

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

Advisory Opinion: 1897
Year Issued: 1999
RPC(s): RPC 1.14(b)(4); Formal Opinion 185
Subject: Payment of settlement to client when there are outstanding medical bills

The inquirer asked if a lawyer, who received personal injury settlement monies, may release the funds directly to the client when the lawyer was aware of substantial medical expenses, absent any guarantee of payment to creditors or medical liens.

While the committee does not give legal advice regarding pending matters, the inquiring lawyer’s reference to and reliance upon RPC 1.14(b)(4) and Formal Opinion 185 are well founded. We express no opinion about possible liability under subrogation or other legal proceedings.