In a recent case, the Appellate Court of Connecticut reversed the trial court’s ruling and held that an attorney’s lien on a divorce settlement does not violate Rule 1.5 of the Rules of Professional Conduct. Rule 1.5(d) of the Rules of Professional Conduct states: “a lawyer shall not enter into an arrangement for, charge, or collect: (1) Any fee in a domestic relations matter, the payment or amount of which is contingent upon the securing of a dissolution of marriage or civil union or upon the amount of alimony or support, or property settlement in lieu thereof….” The trial court believed that the lien would fall under the contingency provision and therefore violate this rule.
The appellate court thought differently, in overturning the trial court’s decision it held that recognizing a charging lien in a dissolution of marriage action would not implicate rule 1.5(d)(1) because a charging lien would not render the attorney’s fee “contingent upon the securing of a dissolution of marriage … or upon the amount of alimony or support, or property settlement in lieu thereof ….“ Rules of Professional Conduct 1.5(d)(1).
Clearly, this rule prohibits an attorney from making his or her fee contingent upon specific outcomes in a dissolution of marriage action. The recognition of a charging lien, which is a type of security interest, however, would not tie the attorney’s fees in a dissolution of marriage action billed at hourly rates or agreed to be a specific amount to the outcome of the case; it merely would allow the attorney to secure payment for services rendered in connection with the dissolution litigation and for the expenses of such dissolution litigation, as in other litigation.
In addition, after considering rule 1.5 and other rules of professional conduct, the court concluded that rule 1.8(i)(1) permityed a charging lien in connection with a dissolution action. Rule 1.8(i) provides: “A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may: (1) Acquire a lien granted by law to secure the lawyer’s fee or expenses….” This rule thus specifically recognizes that an attorney may acquire a charging lien, a lien granted by Connecticut common law, in connection with litigation, and it contains no specific prohibition against such a lien in connection with dissolution of marriage litigation.
Charging Lien Under Connecticut Common Law
The Connecticut common law has been around for over a century and “although not often litigated in the courts of Connecticut, the common-law charging lien has been recognized since 1836….” Id ., at 256, 903 A.2d 697. Our common-law charging lien is actually an equitable lien.
“If an attorney has rendered services and expended money in instituting and conducting a suit and the plaintiff orally agrees that he may retain so much of the avails thereof as will pay him for his services and expenses therein and for previous services in other matters, and he thereafter conducts the suit to a favorable conclusion, he has, as against such plaintiff, an equitable lien upon the avails for the services and expenses in the suit, and for the previous services embraced in the agreement….” Cooke v. Thresher, 51 Conn. 105, 107 (1883).
Here, the fee violated no professional rules and was covered by Connecticut common law. Therefore, the appellate court reversed the trial court’s decision and remanded the case back to the trial court for a determination of the proper fee to be charged. A third party creditor also challenged this action seeking heir own remedy from the settlement proceeds that the attorney was also claiming rights to. The appellate court also addressed this claim and found that while the creditor was entitled to a fair remedy, that remedy could only be redeemed after the attorney had been paid his fee.
Attorney’s Lien for Fees
In citing an American Law Review article the court noted: “Conflicts between an attorney claiming a charging lien for his fees on a judgment recovered through his efforts and a third-party creditor seeking to satisfy a debt owed by the attorney’s client by impressing a lien on the same judgment have usually been resolved by determining which lien first attached to the judgment or its proceeds….”
“Since an attorney’s lien generally attaches to a judgment as of the date the attorney commenced to represent the client in the action which terminates in the judgment, the courts have generally recognized the priority of the attorney’s lien over competing liens which were perfected after he commenced his services … while upholding the priority of the competing lien which was perfected before the commencement of the attorney’s services.” Annot., Priority Between Attorney’s Lien for Fees Against a Judgment and Lien of Creditor Against Same Judgment, 34 A.L.R.4th 665, § 2 (1984).
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