Pursuant to rule 7.2-11 of lawyers’ Rules of Professional Conduct
(lawyers’ Rules) and subrule 2.02(1) of the Paralegal Rules of Conduct (Paralegal Rules), lawyers and
paralegals must not give an undertaking that cannot be fulfilled and must
fulfill every undertaking given.
In some cases, a successor lawyer or paralegal will be asked
to provide a broadly worded undertaking to protect the previous lawyer's or
paralegal's account. When this occurs, the successor lawyer or paralegal should
proceed cautiously as such an undertaking gives no indication as to what the
successor lawyer or paralegal is actually undertaking to do.
For example, if the client is expected to receive settlement
funds in the future, is the protected account to be paid out of any funds you
receive in trust? What if the funds received in trust are not sufficient to
satisfy the outstanding account? What if the client does not receive any funds?
What if you or the client terminate the retainer before settlement funds are
received? What if you receive settlement funds but the client later instructs
you not to pay the outstanding account? Are you personally liable to pay the
outstanding account that you gave an undertaking to protect?
Undertakings regarding unpaid accounts are given for the
protection of the previous lawyer or paralegal, not for the debtor client. In
determining whether to undertake to protect an outstanding lawyer’s or
paralegal’s account, you must comply with the undertaking requirements contained
of the lawyers’ Rules or Paralegal Rules and should employ
the same best practices that apply to dealing with undertakings generally.
of Undertakings and Trust Conditions