Multistate Professional Responsibility Exam Practice Question
An attorney receives a settlement check for a client after protracted negotiations. A healthcare provider claims a share of the proceeds, but the client contests the amount that the provider is demanding. Which approach is best?
Place the settlement funds in the attorney’s business account until both parties sign an agreement
Pay a portion of the provider’s claim and send the rest to the client
Place the disputed sum in a trust account while giving the remaining amount to the client
Release the full settlement to the client and let the healthcare provider seek its claim elsewhere
A lawyer should promptly disburse any undisputed funds to the client and place the disputed portion apart so that it remains secure until the conflict is resolved. Holding everything outside of a trust account or releasing proceeds without regard for the dispute risks prejudice to one or more parties. Attempting a partial payment could also create complications if the allocation is incorrect. Retaining the disputed portion in a trust account while disbursing the remainder to the client meets ethical obligations by safeguarding contested funds and ensuring that rightful recipients receive their share when the disagreement is settled.
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