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October 22, 2019 | Gary Burger

Can a Lawyer Promise to Pay a Lien in a Settlement?

In Missouri, a lawyer cannot guarantee payment of liens in a settlement. The client can, but not the lawyer. Informal Opinion 125 from the Missouri Supreme Court advisory committee states this is a violation of ethics rule 4-1.8(e).

The client has the right to instruct the lawyer not to honor the lien. But see Comment 8 to Rule 4-1.15 (“[a] lawyer may have a duty under applicable law to protect such third-party claims against wrongful interference by the client.

In such cases, when the third-party claim is not frivolous under applicable law, the lawyer must refuse to surrender the property to the client until the claims are resolved”).

Illinois is similar but a bit different. ISBA Advisory Opinion No. 06-01 says that an attorney personally guaranteeing payment of liens is in violation of Rule 1.8(d).It goes on to say, however, that:

"under Rule 1.15(b), a lawyer representing a plaintiff has an obligation to segregate the settlement funds over which a third party has a claim, to notify persons who have an in interest in those funds (including lien/subrogation claimants) and then distribute the funds owed to said persons. Based on language of Rule 1.15 and the court’s opinion in Western States Insurance Co. v. Olivero, it is clear that a lawyer representing a plaintiff is ethically obligated to identify the portion of funds which are due and owing to a lien/subrogation claimant and to ensure that those funds are properly paid to those entities."