Trust Account Rule Change Recommended

The Supreme Court will take comments during a June 5 hearing.

By JAMES S. SUDLER

Spring 2014

The Supreme Court Standing Rules Committee has recommended broad changes to the Trust Account rule, Colo. RPC 1.15.  The Supreme Court has scheduled a hearing on the changes for June 5 at 1:30 p.m. 

The proposed rule breaks the current rule into five parts in order to make it more accessible to lawyers.  Additionally the proposed rule would require banks that offer trust accounts to pay a competitive rate of interest for the benefit of the Colorado Lawyer’s Trust Account Foundation.   

The revision of Rule 1.15 was initiated by the need for COLTAF to receive comparable rates of interest on trust accounts.  As the revision started, those on the committee reviewing the rule decided to make it clearer for practitioners. The obligations on lawyers under the proposed rule would not change in any significant way from what they are now.  Lawyers who accept fees for work not done must still place those funds in a trust account until they are earned.  Lawyers who hold proceeds of settlements for their clients must place those funds in trust as well until disbursed to the client or third parties. 

Should the new rules be passed by the Supreme Court, OARC will alert lawyers and banks to the changes.

Read the proposed changes to Rule 1.15 here.

Jamie Sudler is Chief Deputy Regulation Counsel in the Office of Attorney Regulation Counsel and a member of the Supreme Court Standing Rules Committee.