Speaking of Ethics: Disposal of Client’s Property
From Washington Lawyer, January 2005
By Ernest T. Lindberg
Every practitioner, at some time, will be confronted with the problem of disposing of a client’s property. Rule 1.15(b) of the D.C. Rules of Professional Conduct is the basis of the lawyer’s obligation:
Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this rule or otherwise permitted by law or by agreement with the client, 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 and, upon request by the client or third person, shall promptly render a full accounting regarding such property, subject to Rule 1.6.
Prudence suggests that an agreement at the outset of the representation or at its termination is the optimal solution. Circumstances sometimes arise, however, when an agreement may not exist or cannot be implemented, as, for example, when the lawyer is court appointed and the client is unavailable because the client, on his or her own volition, does not return calls, has moved, and ignores correspondence; has been deported to another country pursuant to an action by federal authorities; or dies. In the absence of an agreement, before disposing of any material in closed client files, lawyers should attempt to contact former clients, in writing, to advise them that the file is about to be purged and afford them an opportunity to request an alternative disposition.
Assuming a reasonable but unsuccessful effort has been made to return the client’s property, the frequent question to the hotline asks how long must the lawyer hold the property in the client’s file. There is no general answer. The length of time a lawyer must hold files or documents depends on the facts of each matter and the materials at issue. American Bar Association (ABA) Informal Opinion 1384 (1977) provides:
In determining the length of time for retention or disposition of a file, a lawyer should exercise discretion. The nature and contents of some files may indicate a need for longer retention than do the nature and contents of other files, based upon their obvious relevance and materiality to matter that can be expected to arise.
The D.C. Bar Legal Ethics Committee in Opinion 283 (1998) noted the District’s “entire file” approach to disposal of client files. See also D.C. Ethics Op. 324 (2004) (disclosure of deceased client’s files). Opinion 283 separates the file into three categories: valuable property subject to Rule 1.15(b); other client property subject to Rule 1.16(d); and nonclient materials. General guidance articulated in the opinion provides:
• A lawyer should use care not to destroy any document which the lawyer has a legal obligation to preserve.
• A lawyer should use care not to destroy or discard information that the lawyer knows or should know may still be necessary or useful in the assertion or defense of the client’s position in a matter for which the applicable statutory limitation period has not expired.
• A lawyer should use care not to destroy or discard original documents provided by the client when they are not otherwise filed or recorded in the public records.
• Copies of documents that previously have been delivered to the client in the course of representation may be destroyed if reasonable within the context of all the circumstances.
• Documents that are otherwise publicly available to the client may, if reasonable, be destroyed.
• Paper copies of documents that are stored on computer disk, CD-ROM, microfilm or a similar technology may be destroyed, provided the stored information is retrievable and the technology is not rendered obsolete over time by the fact that the equipment or hardware required to retrieve such document is no longer available.
• Any documents that the client would have no reasonable expectation for the lawyer to indefinitely preserve may also be destroyed.
• In disposing of a client’s closed file, a lawyer should take care to protect the confidentiality of the contents. See Rule 1.6. . . .
• A lawyer should preserve, perhaps for an extended time, an index or identification of the files that the lawyer has disposed of or destroyed.
Nonvaluable property in the file that does not “clearly belong” to the client or third party may be destroyed, with notice to or in consultation with the client or third-party owner. The committee, however, did not reach legal questions of ownership, since such considerations are beyond the scope of its authority.
Disposal of material in a closed file is not without cost associated with segregation, retrieval, and shipping. Reasonable fees for the time and other costs required for file review, as well as shipping costs, may be charged to the client.
The committee concluded:
Under Rule 1.15(b), upon termination of representation, a lawyer should deliver promptly items of intrinsic value that belong to the former client or a third party. If such valuable property cannot be delivered, the lawyer must safeguard the valuables until they can be delivered, or if necessary, utilize available state law procedures for escheat funds or unclaimed property depositories. Under Rule 1.16(d), upon termination of representation, a lawyer should notify the client of any other client property in the former client’s closed files and ascertain whether to retain, surrender or destroy such materials. In implementing the client’s instructions in this regard, absent agreement to the contrary, the lawyer may require the former client to pay the costs of delivery or storage of the files. If the client fails to respond to the lawyer’s request for instructions, after five years and a final attempt to notify the client, the attorney may destroy any materials “not reasonably necessary to protect a client’s interest.”
Legal ethics counsel Ernest T. Lindberg and Lisa Weatherspoon are available for telephone inquiries at 202-737-4700, ext. 231 or 232, or by e-mail at firstname.lastname@example.org.