081516 RIEO, ETH 2016-08

• Case Date: August 15, 2016
• Court: Rhode Island

ETH 2016-08 Ethics Advisory Panel Op. 2016-08 Rhode Island Ethics Opinions Rhode Island Supreme Court August 15, 2016           FINAL          FACTS          The inquiring attorney seeks the Panel’s guidance about the return of excess retainer funds. The inquiring attorney was hired by a client to represent her in various matters. For one matter, the client agreed to pay the attorney a specified amount in advance, pursuant to a fee agreement. For the remaining matters, the client agreed to pay another specified amount in advance, pursuant to a second fee agreement. A family member and a nonprofit organization paid the inquiring attorney the amounts under the fee agreements.          The inquiring attorney’s representation of the client has ended. After funds on account for this client were applied to attorney’s fees, there remains a surplus. The client insists that the inquiring attorney should refund the surplus to her, and the organization claims that the surplus funds be refunded to it.          ISSUE PRESENTED          If a third party payor advances attorney’s fees for a client, and there are excess funds at the conclusion of the representation, to whom must the inquiring attorney refund the excess funds?          OPINION          When an attorney receives funds for fees from a third-party payor, the third-party payor, and not the client, is entitled to the refund of excess fees at the conclusion of the representation, unless there are agreements specifying otherwise.          REASONING          The inquiring attorney submitted copies of the fee agreements to the Panel. Both agreements contained the following language:

Any amount remaining on deposit upon completion of this matter or termination of our services to you will be refunded, unless there is a dispute over fees, in which case it will remain until any dispute is resolved.

         There are no terms in these provisions that specify to whom refunds would be made when one other than the client advances the fees.          A lawyer is required to refund unearned fees under...