Bench & Bar March/April 2026

ETHICS CORNER

consent to accept the $12,500 settlement before he became unreachable, and the set‑ tlement was negotiated and agreed while that authority remained in place. Based on these facts, and the guidance of SCR 3.130(1.2)(a) and E‑433, I conclude that the settlement itself is properly authorized. The more difficult question is not whether you may settle, but how to protect your client’s funds and complete the ministerial acts necessary to preserve the settlement proceeds now that your client is missing. KBA E‑433 emphasizes that when a client disappears, the lawyer remains a fiduciary with an obligation to take reasonable steps to protect the client’s interests rather than allow a claim or asset to lapse simply because the client cannot be located. Your engagement agreement contains language by which the client gave you “power of attorney to execute … checks … [and] releases” and “full authority” to negotiate settlement of the claim, subject to the express requirement that settlement will not be effected without the client’s consent.

reasonable procedural or ministerial steps necessary to carry out the representation once the client has set the objectives. Here, the objective—acceptance of the settle‑ ment—was already established by the client. Deposit into trust is a mechanical step nec‑ essary to prevent loss, theft, or expiration of the check, and therefore falls within the lawyer’s implied authority. 1 Therefore, given that (1) the client specif‑ ically consented to the $12,500 settlement while you were in contact with him, (2) the engagement agreement was signed and witnessed, and (3) the proposed use of the power of attorney is limited to receiving and preserving the settlement proceeds, you may endorse the check as the client’s agent for the limited purpose of depositing it into your trust account. To minimize risk and avoid any suggestion that you are exceed‑ ing the scope of your authority, you should endorse the instrument in a form such as “Client Name, by Attorney Name, Agent” and deposit it into your client trust (IOLTA) account while you undertake reasonable

efforts to locate him. Failing to deposit the check, allowing it to expire, or returning the funds to the carrier without the cli‑ ent’s informed instruction would expose the client to financial harm and would be inconsistent with the duties of diligence and safekeeping found in SCR 3.130 (1.15). We next turn to your efforts to make contact with your client. KBA E‑433 instructs that, when a client disappears, the lawyer must take reasonable steps to locate the client using means commensurate with the value of the property and the circumstances. In practice, your file should reflect the specific steps you take, which may include: • Repeated phone calls, text messages, and emails to all last‑known contact information. • Certified mail to the client’s last known physical address, including any over‑ seas address the client disclosed. • Review of your file for alter‑ nate contacts (family members,

Kentucky’s Uniform Power of Attorney Act includes KRS 457.350 which states that unless the power of attorney otherwise pro‑ vides, general authority with respect to claims and liti‑ gation granted in a power of attorney includes the power to “receive money

or other thing of value paid in settlement of or as proceeds of a claim or litigation.” This logically encompasses endorsing or deposit‑ ing a settlement check made payable to the principal.

Likewise, under SCR 3.130(1.2) and its Com‑ ments, a lawyer is impliedly autho‑ rized to take

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