Opinion 00-2 (Reconsideration)
FLORIDA BAR ETHICS OPINION
OPINION 00-2 (Reconsideration)
January 21, 2005
Advisory ethics opinions are not binding.
A lawyer may participate in a settlement agreement in which the insurance company deposits
directly into a client’s financial account only the portion of the settlement proceeds owed to the
client, but may not participate in a settlement if the funds deposited directly into the client’s
financial account include attorney’s fees, costs and funds to which a third party may have a
OPINIONS: 00-2, 02-4
The Committee has reconsidered Opinion 00-2 which discourages lawyers from being
involved in settlement agreements in which an insurance company places funds directly into an
account in a client’s name instead of sending the lawyer a check which is then deposited into the
lawyer’s trust account.
Opinion 00-2 concludes that this type of arrangement, sometimes known as a “Safe
Haven Account” or “FUNDaccount,” prevents a lawyer from fulfilling his or her ethical
obligations to third parties. See Rule 5-1.1 and Comment, Rules Regulating The Florida Bar.
Additionally, the Committee was concerned about “reducing available funds that otherwise
would be used to assist in the administration of justice through participation in the Supreme
Court approved IOTA program.”
The Committee is concerned that Opinion 00-2 might be interpreted as mandating
limitations on the client’s ability to direct payments of the client’s share of settlement funds into
specific financial accounts or to designated third party recipients without having those funds
placed first in a lawyer’s trust account. The client has wide discretion in directing the manner in
which the monies owed to the client are distributed provided, however, that the client may not
direct payment of funds in a manner intended to avoid the client’s legal obligation to pay the
client’s lawyers or to pay debts owed to third parties. The Committee believes that the concerns
expressed in Opinion 00-2 can be avoided in a settlement where the only funds going directly
from the insurance company into a client’s financial account or to another recipient designated
by the client are monies owed to the client and the insurance company issues a separate check to
the attorney for the remaining balance, including attorney’s fees, any applicable costs, and
amounts owed to third parties which are subject to lien or other valid legal claim that a lawyer is
obligated to protect. See Florida Ethics Opinion 02-4. The attorney would then deposit these
funds into his or her attorney trust account and distribute the funds in accordance with the
attorney’s ethical obligations.
This agreement gives a lawyer control over that portion of settlement proceeds covering
fees, costs, and amounts to which third parties may have valid legal claims that a lawyer is
obligated to protect. This permits the lawyer to fulfill his or her ethical duties under Rule 5-1.1
and Comment, Rules Regulating The Florida Bar. It also allows for the collection of interest on
these funds, through placement in an IOTA account when required by Rule 5-1.1(e).
In conclusion, a lawyer may participate in an arrangement where an insurance company
pays only that portion of the settlement proceeds owed directly to the client into a client’s
financial account or to another recipient designated by the client. As stated in Opinion 00-2,
however, a lawyer should not participate in a settlement if the funds deposited into the client’s
account include the attorney’s fees, costs and funds to which a third party may have a claim.