UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.
Ethics Advisory Opinion 01-02
Facts
A local physician has sent a form letter to attorneys who represent the physician’s patients. The form letter states that the physician’s opinion is that Rule 1.15 provides him with a lien against any proceeds recovered by his patient in a personal injury or workers’ compensation claim. He asserts that the Rule requires attorneys representing his patients to pay his unpaid medical bills in the event the patient makes a recovery for the injuries for which the patient received medical treatment. The client has not signed a “doctor’s lien” or other document providing the physician with a lien against the proceeds of a settlement or Judgment.
Question
Does Rule 1.15 provide the physician with a lien against the client’s recovery where there is otherwise no valid lien or assignment?
Summary
Rule 1.15 does not provide the physician with a lien against the client’s recovery where there is otherwise no valid lien or assignment. The Rules of Professional Conduct do not create substantive rights.
Opinion
Past opinions from this committee regarding this issue were based upon the attorney’s knowledge of a written assignment from the client to the third party. In the present factual situation, no specific assignment exists. Instead, the third party physician has sent a blanket form letter to all those attorneys who represent his patients.
Rule 1.15 (b) states that a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive, except as stated in this Rule or otherwise permitted by law or by agreement with the client. The issue as to the lawyer’s ethical obligation then becomes based upon whether the third party is entitled to receive these funds.
Earlier opinions of this committee assumed that the third party’s lien was valid and the assignment was irrevocable. Without a valid lien or assignment, the lawyer would not have an ethical obligation to that third party. Therefore, under these circumstances, the attorney should follow the wishes of his client in distributing the proceeds of a settlement.
This result is consistent with Rule 1.7 (b), which states that a lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or third person. The comment to Rule 1.7 states that loyalty to a client prohibits undertaking representation directly adverse to that client without that client’s consent.
The attorney should consider his primary ethical obligation to be dictated by Rule 1.7 with respect to loyalty to his client.