Tuesday, September 1, 2009

Third Party Fiduciary Obligations

From the web page of the Ohio Supreme Court:

The Supreme Court of Ohio will accept public comment until Sept. 30 on a proposed rule change about lawyers’ duty to safeguard client funds and property in which third persons claim an interest.

The proposed amendments to Prof. Cond. R. 1.15(d) and Comment [4] are based on a 2007 Advisory Opinion issued by the Board of Commissioners on Grievances & Discipline and recommendations issued in late 2008 by a special Ohio State Bar Association committee.

The current rule requires a lawyer to protect the interest of a third-party in client funds and property held by the client, unless the claim is frivolous. The proposed rule changes specify that a lawyer must have “actual knowledge” of a third person’s interest and that the claimed interest must be “a statutory lien, a final judgment addressing disposition of the funds or property, or a written agreement by the client of the lawyer on behalf of the client guaranteeing payment from the funds or property.”

Changes proposed to the comment portion of the rule offer guidance about a lawyer’s ethical duties depending on whether the funds or property is in dispute and whether the client or third person’s claim to the funds or property is lawful. Where there is a dispute over interest in the funds or property, a lawyer must hold the funds or property in a trust account separate from the lawyer’s funds, until the dispute is resolved.

Update: go to this link and click on Opinion No. 07-007 to find the Advisory Opinion.

(Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2009/09/third-party-fiduciary-obligations.html

Economics | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef0120a53c0993970b

Listed below are links to weblogs that reference Third Party Fiduciary Obligations:

Comments

I am looking for the advisory opinion but the link is not working. Can you post another link? Thanks so much.

Posted by: Landya | Sep 4, 2009 7:35:53 AM

Post a comment