2009-09

South Carolina Court Administration

South Carolina Supreme Court
Columbia, South Carolina

MEMORANDUM

TO:                 Magistrates and Municipal Judges

FROM:           Robert L. McCurdy, Assistant Director

RE:                 Posting of Bond by Attorneys

DATE:           February 2, 2010

Court Administration has been asked to review whether an attorney may post bond for a client using a check from an escrow or trust account. State law prohibits an attorney from becoming a surety on a bail bond for any person. (See §38-53-190 and Rule 604, SCACR). However, based on Ethics Advisory Opinion No. 1990-06, copy attached, and consultation with the Office of Disciplinary Counsel, the Code of Professional Responsibility does not prohibit an attorney from depositing a check as cash for a client’s recognizance with a clerk of court, magistrate or municipal judge under the following limited conditions:

• the funds must be received by the attorney from the client or from a third party on behalf of the client
• the funds must be placed in an the attorney's identifiable trust account maintained in the state in which the attorney's law office is situated
• the check deposited with the court must clearly indicate that it is a trust account and not the attorney's operational account
• the check must clearly indicate that the check was drafted for the purpose of posting bond for the defendant
• the check must also clearly indicate who provided the funds for the check so that the fund provider may be listed as the surety on the bond instead of the attorney

Should you have questions concerning this matter, please do not hesitate to contact this Office.

RLM/mhb
Attachment

Ethics Advisory Opinion 90-06

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.

Full Text

Does the current or proposed Code of Professional Responsibility prohibit an attorney from:

1. depositing cash in lieu of a surety bond with a clerk of court, magistrate or municipal judge, on behalf of his or her client, using:

a. a check drawn on the attorney's trust accounts from funds deposited in that account from the client;
b. a check drawn on the attorney's account, not identified as a trust account, so that it is unclear whether or not the attorney advanced any money to the client for cash in lieu of bond?

Summary:

The current Code of Professional Responsibility does not expressly prohibit an attorney from depositing a check as cash in lieu of a surety bond with a clerk of court, magistrate or municipal judge on behalf of his or her client provided the check is drawn on the client's funds deposited in an identifiable trust account maintained in the state in which the attorney's law office is situated. (DR 9-102 and Rule 1.15 of the Rules of Professional Conduct of South Carolina). The trust account check should also clearly indicate the purpose for which it was drafted. Although the Code of Professional Responsibility and Rules of Professional Conduct does not expressly prohibit an attorney from utilizing a check drawn on an account other than an identifiable trust account, it should be the practice of all attorneys to do such in order to avoid any appearance of impropriety and commingling of funds.

Opinion:

Although an attorney may deposit with a clerk of court, magistrate or municipal judge a check drawn on an identifiable trust account as cash in lieu of a surety bond, he or she may not advance money to a client in lieu of a surety bond. The rules of Professional Responsibility and the Rules of Professional Conduct expressly prohibit cash advancements or any financial assistance to a client in connection with pending litigation. An attorney may, however, make such advances from monies already provided him by the client provided (1) the clients is given notice the money, as provided, will be used as cash in lieu of surety; and, (2) the funds will be drawn on an identifiable trust account maintained in the state in which the attorney's law office is situated.

The Rules of Professional Responsibility and Rules of Professional Conduct specifically outline instances in which an attorney may advance cost for a client due to pending or contemplated litigation and instances to the contrary.

To the Committee, the aforementioned question raises three (3) issues: (1) may an attorney advance money to a client for cash in lieu of a surety bond; (2) if not, may the attorney transmit monies previously provided him by the client to court officials as cash in lieu of bond; and, (3) if use of checks is permissible, on what type of account should funds be drawn?

1. Advancement of Money to Client as Cash in Lieu of Surety Bond. Disciplinary Rule 5-103(B) of the Rules of Professional Responsibility and Rule 1.8(e) of the Rules of Professional Conduct expressly prohibit cash advancements or any financial assistance to a client in connection with pending or contemplated litigation.

DR 5-103(B) states, in pertinent part, that:
"While representing a client in connection with contemplated or pending litigation, a lawyer shall not advance or guarantee financial assistance to his client. . . ." (emphasis added) Rule 1.8(e) states, in pertinent part, that:
"A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation." Clearly, the advancement of money to clients as cash in lieu of surety bond is prohibited as providing financial assistance to a client in connection with pending or contemplated litigation.

2. Circumstances under which attorney may transmit monies previously provided him by the client to court official as cash in lieu of surety bond.

3. Type of account from which funds should be drawn.

An attorney may deposit a check as cash in lieu of a surety bond with court officials provided the check is drawn on the client's funds deposited in an identifiable trust account maintained in the state in which the attorney's law office is situated. (DR 9-102 and Rule 1.5 of the Rules of Professional Conduct). The trust account check must clearly indicate the purpose for which it was drafted and the client must be given notice of the attorney's intentions.

DR 9-102(A) and Rule 1.15(a) clearly mandate that all funds paid to an attorney, other than advances for costs/expenses, shall be deposited in identifiable trust accounts maintained in the state in which the law office is situated. The spirit of DR 9-102 reflects a prohibition against commingling of attorney's fees with monies of clients and promotes the separation of funds of a client from that of an attorney in order to avoid even the appearance of impropriety.