Bench & Bar March/April 2026

ETHICS CORNER

LEGAL ETHICS CORNER BY SHELDON G. GILMAN O ur Supreme Court authorized the creation of an Ethics Hotline

that is pending in court. Hotline opinions are not intended to be used as an expert opinion; they are not binding on any court; and do not reflect the opinion of the KBA. Hotline attorneys must retain the caller’s inquiry confidentiality, but the requesting attorney may waive confidentiality. Copies of Hotline opinions are sent to the chair of the KBA’s Ethics Committee for general information regarding the operation of the Hotline, and to determine if it is appropriate for the Committee to consider the issuance of a Formal Opinion. A copy is sent to the executive director for statistical informa tional purposes. Copies are not sent to the Office of Bar Counsel. Hotline members are granted immunity from process and are not available to testify or give an opinion to the court or others in connection with their advice. SETTLEMENT PROCEEDS You advise that your client suffered personal injuries in an automobile accident involving multiple parties. The at-fault driver's insur ance was a 25/50k policy which is to be split among all the claimants with your client to receive $12,500. The case settled before your client could sign a Limited Power of Attor ney, ostensibly to authorize you to accept and deposit the check into your firm’s escrow account. You have been unable to locate your client and believe that he moved back to his home country outside the U.S., and you have no way to contact him. Your firm’s engagement letter contains the follow ing language regarding your authorization to act on his behalf: I hereby give him (the attorney) my power of attorney to execute all com plaints, claims, contracts, checks, settlements, drafts, compromises, releases, verifications, dismissals, deposits and orders as I could myself.

I give him full authority to file such legal action or actions that may be advisable in his judgment and to negotiate with other parties or their attorney for settlement of claims. It is expressly understood that settle ment of my case or cases will not be effected without my consent. Your client signed the engagement agree ment in the presence of the attorney who signed the case up. As a result of the settle ment discussions you conferred with your client, advised him of the settlement offer and he gave you his verbal consent to accept it and close the case. As you are unable to reach your client, you ask if you may accept the funds and deposit them in your firm’s escrow account and hold them until such time as you can get back in touch with him. Based on my review of Kentucky’s Rules of Professional Conduct, and KBA Ethics Opinion E-433, the short answer is yes, you may (and likely must) deposit your client’s portion of the settlement funds into your firm’s escrow account. The basis of my opin ion is as follows. Under SCR 3.130(1.2)(a), a lawyer must abide by a client’s decision whether to accept or reject a settlement offer, and may not unilaterally settle without client authorization. KBA Ethics Opinion E‑433 addresses the situation of a missing client and states that a lawyer may not accept a settlement offer on behalf of a missing client unless the client has given specific authority to settle on stated terms; the opinion also notes that, as a practical matter, concluding a settlement will be “very unlikely” if the client is unavailable to sign a release. In your case, you obtained the client’s specific verbal

which has now been in existence for more than 30 years. This Ethics Corner presents a sample of Hotline opinions for the purpose of illustrating ethi cal and practical issues that lawyers might face in their everyday practice and how Hotline attorneys may be of help. SCR 3.530 (5) provides that an attorney will not be disciplined for any professional act performed by that attorney in compliance with an informal opinion fur nished by the Hotline attorney “provided that the written request clearly, fairly, accu rately and completely states

such attorney’s contemplated professional act.” In addition to ethics advice, Hotline attorneys will, in many instances, use their years of experience to help the concerned lawyer exam ine the issue from a practical point of view, and sometimes ask the requesting attorney: “Are you really sure

you want to do this?” Hotline attorneys are not permitted to render an opin ion on questions of law, about past conduct, about another

attorney’s con duct, about the subject of a pending grievance or a matter

33 bench & bar