Postdating Trust Account Settlement Checks
Annotate this Case 120 N.J.L.J. 1113
December 10, 1987
Appointed by the New Jersey Supreme Court
OPINION 609
Postdating Trust
Account Settlement Checks
The issue presented is whether it is ethical under RPC 1.15 and R. 1:21-6 for an attorney to postdate an attorney trust account check given to a client or to another attorney in a personal injury settlement.
According to the inquirer, in tort cases the settlement draft which is ordinarily made payable to both the claimant and the attorney for the claimant [In re Conroy, 56 N.J. 279, 282 (1970)] is properly deposited in the attorney's trust account after endorsement. In order to minimize inconvenience to the client, the inquirer states that there is a practice of giving the client a postdated check for the claimant's net share of the recovery. Where a contingent fee is charged, a recovery statement must be issued to the client under R. 1:21-7(g). See also RPC 1.5(c), and it is convenient to accomplish all of these purposes when the client comes in to endorse the check for deposit.
Of course, it would be improper to draw upon these funds until the check has cleared as we have expressly held in Opinion 454, 105 N.J.L.J. 441 (1980), and this is true even where the instrument is certified or is a cashier's or bank check representing the settlement proceeds of a negligence case.
Accordingly, we hold that it is improper for an attorney to issue any checks drawn upon an attorney's trust account until the instrument representing the funds against which the check or checks are drawn has in fact cleared.
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