What steps should a lawyer take when a client cannot be found?
When a client disappears, two substantive issues come into play:
a) Without means of receiving information or directions from the client, may the lawyer terminate the relationship, and if so, how does the lawyer effect such termination?
b) What does the lawyer do with any property in his or her possession belonging to the absentee client, such as undisbursed funds, other property, or the file itself?
A lawyer should take all prudent steps to locate a client who has effectively disappeared before the termination of representation. These efforts may include the use of Internet search services and private investigators, a review of Probate Court records, a search of newspaper articles and obituaries, and interviews with friends, neighbors, or relatives of the lost client.
The degree of reasonableness, or the depth of effort with which the lawyer conducts this search depends on any number of factors surrounding the relationship. If there are substantial sums of money at stake, if trial is imminent, or if a statute of limitations is about to expire, the lawyer is expected to exercise greater effort than if only routine matters remain, such as if the case has been closed and the only issue is to return the file to the client.
What duties are imposed upon an attorney to effectuate the termination of representation of a client gone missing?
The South Carolina Bar addressed a portion of this issue in South Carolina Ethics Advisory Opinion 98-07 (EAO): when a lawyer enters into a contingency fee agreement and after reasonable diligence cannot find his client, the lawyer may consider the representation terminated. In pertinent part, this opinion tied its reasoning to RPC 1.16. Specifically, the opinion pointed to the language that states â€œa lawyer may withdraw from representing a client if the client fails substantially to fulfill an obligation to the lawyer regarding the lawyerâ€™s services . . . and has been given reasonable warning . . .â€ RPC 1.16(b)(4). Opinion 98-07 also cited RPC 1.16(b)(5): a lawyer may withdraw from representation where it [the representation] â€œ . . . has been rendered unreasonably difficult by the client.â€ In summation, this opinion stands for the general proposition that when a lawyer seeks to terminate a relationship with a missing client, so long as the lawyer utilizes reasonable diligence in seeking to locate the client, the lawyer should feel confident in considering the relationship terminated.
When a lawyer terminates a relationship with the client, the lawyer should routinely return all files, funds, and any other property belonging to the client. When a client cannot be located, the lawyer is tasked with holding the clientâ€™s property. See RPC 1.15. The Comment to Rule 1.15 states that a â€œlawyer should hold property of others with the care required of a professional fiduciary.â€ Here, the Rules of Professional Conduct clearly set forth the lawyerâ€™s duty to safeguard the property and eventually to effect proper disposition. See below.
Generally speaking, when a client cannot be found, a lawyer must hold the clientâ€™s property for a minimum of six years after the termination of their relationship. RPC 1.15(a). A lawyer is required to keep all financial records that pertain, incidentally or directly, to a client for a period of six years post-termination of their relationship. See S.C. App. Ct. Rule 417. When deciding whether to discard old client property, it is important that the relationship has clearly been terminated before factoring in the six year holding period.
The South Carolina Bar addressed this issue in EAO 92-19. In that opinion, this Bar expressed its belief that â€œfile contents should not be disposed of until such time as it is reasonable to believe that their disposal will not prejudice the rights of the client.â€ This statement may be interpreted to mean that even after six years there could be some circumstances where a clientâ€™s property should not be destroyed. For example, a lawyer should not dispose of original executed wills, trust agreements, or like documents without prejudicing his client. See also EAO 98-33.
The South Carolina Barâ€™s Ethics Advisory Committee recommends that all lawyers take preventive measures to head off any problems associated with file retention such as including a file retention policy in the fee agreement. EAO 92-19 & 98-33.
The most pressing question any lawyer must face when a client has disappeared is what to do with funds or other client property. Client funds are regarded as property, thus RPC 1.15 is the proper place to start. As noted, the time a lawyer must retain a clientâ€™s property after termination of the relationship is minimally six years. At the end of this time the lawyer has two options. First, after due diligence and notice by publication the lawyer may â€œpetition the Court of Common Pleas for an order permitting the lawyer to pay the money to the Clerk of Court to be held by the Clerk until the money is claimed by the client or escheats to the state.â€ EAO 83-18. Another option is for the attorney to follow the procedure set forth in S.C. Code Ann. Â§ 27-18-10 (1976), et seq. This statutory procedure allows for the funds to be treated as abandoned property and paid over to the South Carolina Tax Commission. See also EAO 95-03 & 02-05.
It may be helpful for attorneys to include in their engagement agreements a provision treating the eventuality of a disappeared or non-communicative client. Suggested language could include "One of the duties and responsibilities you have in our relationship is to keep me informed of your mailing address and other contact information. If at any time during the course of our relationship, your address becomes unknown or I am otherwise unable to contact you, I shall be permitted to withdraw from this representation by sending a certified letter to you at your last known address and by depositing with the Clerk of Court for the county of your last known residence any property owned by you in my possession, including but not limited to items of personal property, funds, and the actual client file.