Formal Opinion 110: Assertion of Attorney's Charging Lien and Taking Security Interest in Client Property to Protect Fees

• Publication year: 2002
• Pages: 27
• Citation: Vol. 31 No. 2 Pg. 27

31 Colo.Law. 27 Colorado Lawyer 2002.

2002, April, Pg. 27. Formal Opinion 110: Assertion of Attorney's Charging Lien and Taking Security Interest in Client Property to Protect Fees

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Vol. 31, No. 2, Pg. 27

The Colorado Lawyer
April 2002
Vol. 31, No. 4 [Page 27]

Departments
CBA Ethics Committee Formal Opinions
Formal Opinion 110: Assertion of Attorney's Charging Lien and Taking Security Interest in Client Property to Protect Fees

Adopted January 19, 2002*

*As a result of the Colorado Court of Appeals opinion in In re the Marriage of Mitchell, annc'd 2/14/02, and printed on page 153 of this issue of The Colorado Lawyer, the CBA Ethics Committee issued an Addendum to Formal Opinion 110 on March 16, 2002. This Addendum will be printed in the May 2002 issue of The Colorado Lawyer

SCOPE

This opinion discusses the situations when it is permissible to assert a charging lien, the limitations on asserting such liens, and the ethical requirements for taking a security interest in client property.1

SYLLABUS

A lawyer may ethically assert a charging lien for payment of legal services the lawyer has rendered, against property or funds the lawyer has assisted or is assisting the client to obtain. Colo. RPC 1.8(j) and C.R.S. § 12-15-119(2001). A lawyer may take a security interest in client property for payment of fees so long as the lawyer complies with Colo. RPC 1.8(a)

DISCUSSION

Charging Liens

Colo. RPC 1.8(j) prohibits a lawyer from acquiring a proprietary interest in a cause of action or the subject matter of litigation except that the lawyer may have a lien permitted by law in order to secure the lawyer's fees or expenses. In Colorado, the right to a charging lien arises by statute only, C.R.S. § 12-5-119 (2001), since no common law right to a lien exists. People v. Brown, 840 P.2d 1085 (Colo 1992). The right to a lien accrues when the lawyer begins the representation, In re Marriage of Berkand, 762 P.2d 779 (Colo. App. 1988). A lawyer may ethically assert a charging lien for payment of legal services the lawyer has rendered, provided the lawyer complies with the statute.

Colo. RPC 1.8(j) provides:

A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may:

(1) acquire a lien granted by law to secure the lawyer's fee or expenses; and

(2) contract with a client for a reasonable contingent fee in a civil case.

The lien statute, C.R.S. § 12-5-119 (2001), provides in pertinent part:

All attorneys and counselors-at-law shall have a lien on any money, property, choses in action, or claims and demands in their hands, on any judgment they may have obtained or assisted in obtaining, in whole or in part, and on any and all claims and demands in suit for any fees or balance of fees due or to become due from any client. In the case of demands in suit and in the case of judgments obtained in whole or in part by any attorney, such attorney may file, with the clerk of the court wherein such cause is pending, notice of his client as lienor, setting forth specifically the agreement of compensation between such attorney and his client, which notice, duly entered of record, shall be noticed to all persons and to all parties, including the judgment creditor. . . . Such lien may be enforced by the proper civil action.

The purpose of the charging...