order-adopting-new-rule-8-rpc-1.15(f).pdf (2020)
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06/05/2020
IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
IN RE: PETITION FOR THE ADOPTION OF A NEW
TENN. SUP. CT. R. 8, RPC 1.15(f)
No. ADM2019-02079
ORDER
On November 21, 2019, the Tennessee Board of Professional Responsibility
(âBPRâ) and the Tennessee Lawyersâ Fund for Client Protection (âTLFCPâ) filed a
petition asking the Court to amend Rule 8, RPC 1.15 of the Rules of the Tennessee
Supreme Court by adopting a new RPC 1.15(f).
On December 3, 2019, the Court entered an order soliciting public comments on
the proposed amendment. The deadline for submitting written comments was February
3, 2020. The Tennessee Bar Association (âTBAâ) was granted two extensions for
comment, extending the comment period to June 3, 2020. The TBA filed its comment on
June 3, 2020, stating that the TBA supports the proposed amendment. The TBAâs
comment was the only comment the Court received during the comment period.
After due consideration, the Court hereby adopts the amendment to Tennessee
Supreme Court Rule 8, RPC 1.15 as set out in the attached Appendix. The amendment
shall take effect immediately upon the filing of this Order.
The Clerk shall provide a copy of this Order, including the Appendix, to
LexisNexis and to Thomson Reuters. In addition, this Order, including the Appendix,
shall be posted on the Courtâs website.
It is so ORDERED.
PER CURIAM
APPENDIX
TENN. SUP. CT. R. 8, RPC 1.15
[New text is indicated by underlining]
(a) A lawyer shall hold property and funds of clients or third persons that are in a
lawyerâs possession in connection with a representation separate from the lawyerâs own
property and funds.
(b) Funds belonging to clients or third persons shall be deposited in a separate account
maintained in a financial institution, deposits of which are insured by the Federal Deposit
Insurance Corporation (FDIC) and/or National Credit Union Association (NCUA),
having a deposit-accepting office located in the state where the lawyerâs office is situated
(or elsewhere with the consent of the client or third person) and which participates in the
required overdraft notification program as required by Supreme Court Rule 9, Section
35.1. A lawyer may deposit the lawyerâs own funds in such an account for the sole
purpose of paying financial institution service charges or fees on that account, but only in
an amount reasonably necessary for that purpose. Other property shall be identified as
such and appropriately safeguarded. Complete records of such funds and other property
shall be kept by the lawyer and shall be preserved for a period of five years after
termination of the representation.
(1) Except as provided by subparagraph (b)(2), interest earned on accounts in which the
funds of clients or third persons are deposited, less any deduction for financial institution
service charges or fees (other than overdraft charges) and intangible taxes collected with
respect to the deposited funds, shall belong to the clients or third persons whose funds are
deposited, and the lawyer shall have no right or claim to such interest. Overdraft charges
shall not be deducted from accrued interest and shall be the responsibility of the lawyer.
(2) A lawyer shall deposit all funds of clients and third persons that are nominal in
amount or expected to be held for a short period of time such that the funds cannot earn
income for the benefit of the client or third persons in excess of the costs incurred to
secure such income in one or more pooled accounts known as an âInterest on Lawyersâ
Trust Accountâ (âIOLTAâ), in accordance with the requirements of Supreme Court Rule
43. A lawyer shall not deposit funds in any account for the purpose of complying with
this sub-section unless the account participates in the IOLTA program under Rule 43.
(3) The determination of whether funds are required to be deposited in an IOLTA account
pursuant to subparagraph (b)(2) rests in the sound discretion of the lawyer. No charge of
ethical impropriety or other breach of professional conduct shall attend a lawyerâs
exercise of good faith judgment in making such a determination.
(c) A lawyer shall deposit into a client trust account legal fees and expenses that have
been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses
incurred.
(d) Upon receiving funds or other property in which a client or third person has an
interest, a lawyer shall promptly notify the client or third person. Except as stated in this
Rule or otherwise permitted by law or by agreement with the client, a lawyer shall
promptly deliver to the client or third person any funds or other property that the client or
third person is entitled to receive and, upon request by the client or third person, shall
promptly render a full accounting regarding such funds or other property.
(e) When in the course of representation a lawyer is in possession of property or funds in
which two or more persons (one of whom may be the lawyer) claim interests, the
property shall be kept separate by the lawyer until the dispute is resolved. The lawyer
shall promptly distribute all portions of the property or funds as to which the interests are
not in dispute.
(f) A lawyer who learns of unidentified funds in an IOLTA account must make periodic
efforts to identify and return the funds to the rightful owner. If after 12 months of the
discovery of the unidentified funds the lawyer determines that ascertaining the ownership
or securing the return of the funds will not succeed, the lawyer must remit the funds to
the Tennessee Lawyersâ Fund for Client Protection (TLFCP). No charge of ethical
impropriety or other breach of professional conduct shall attend to a lawyerâs exercise of
reasonable judgment under this paragraph (f).
A lawyer who either remits funds in error or later ascertains the ownership of remitted
funds may make a claim to TLFCP, which after verification of the claim will return the
funds to the lawyer.
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