Vol. 6, No. 2, Pg. 36. PRO/CON: DUTY TO A CLIENT'S CREDITORS A LAWYER'S DUTY OF LOYALTY IS TO THE CLIENT, NOT TO THE CLIENT'S CREDITOIIS.

• Author: By J. Leeds Barroll

South Carolina Lawyer

1994.

Vol. 6, No. 2, Pg. 36.

PRO/CON: DUTY TO A CLIENT'S CREDITORS A LAWYER'S DUTY OF LOYALTY IS TO THE CLIENT, NOT TO THE CLIENT'S CREDITOIIS

36PRO/CON: DUTY TO A CLIENT'S CREDITORS A LAWYER'S DUTY OF LOYALTY IS TO THE CLIENT, NOT TO THE CLIENT'S CREDITOIISBy J. Leeds BarrollRecently an article in the Ethics Watch column [John Freeman, Money Management 4 S.C. Law. (Nov./Dec. 1992) at 6] argued that a lawyer must protect a third party creditor out of the proceeds of a personal injury settlement even over the specific objection of the client.

In this author's opinion, such protection would constitute an improper abandonment of a lawyer's duty of loyalty to that client, which cannot be permitted, much less required.

It should be emphasized that workers' compensation liens are an exception to the premise of this discussion. These liens must be honored only because they are specifically required to be honored by statute.

The South Carolina Bar Ethics Advisory Committee has issued three previous opinions on this issue. In Opinions 81-14 and 91-10, it was opined that the lawyer must pay the client on demand and ignore the assignment. The 1991 Opinion was issued interpreting the current Rules of Professional Conduct. Then, in Opinion 93-14, the Committee, with new members, changed its position in the prior opinions and stated that the creditor should be notified and the money kept in trust until the dispute between the client and the creditor is resolved.

In rendering Opinion 93-14, the Committee simultaneously acknowledged a conflict between the current interpretation of Rule 1.15 (sell outthe client) and Rule 1.6 (duty to honor a client's confidences). The matter was sent to the Professional Responsibility Committee for its consideration.

With all due respect, lawyers do not need a committee to instruct them on their duty of loyalty to their clients, which is the most basic principle of the practice of law.

The preamble to the Rules of Professional Conduct states that, as an "advocate, a lawyer zealously asserts the client's position under the rules of the adversary system." The duty of a lawyer to be loyal to his or her client is the foundation of the legal system. The comment to Rule 1.7 refers to loyalty as "an essential element in the lawyer's relationship to a client." In addition, Rule 1.7(b) states that a...