Court seeking comment on proposed rule amendments that could benefit bar foundation

The Indiana Supreme Court is requesting public comment on proposed rule amendments that, if approved, could provide additional legal aid funds to the Indiana Bar Foundation.

The first proposed amendment concerns Professional Conduct Rule 1.15. The amendment would add a mechanism to address situations where an attorney, law firm or estate of a deceased attorney either winds up in possession of client or third-party funds and the client or third-party cannot be located, despite diligent efforts to locate the rightful owner, or is in possession of funds in a client trust account that cannot be traced back to a particular client.

Under new section “h” of Rule 1.15, the proposed amendment states that a lawyer, law firm or estate of a deceased lawyer with unclaimed or unidentified funds in a client trust account must take reasonable efforts to locate and distribute the funds to the owner.

The amendment defines unclaimed funds as monies which a lawyer or firm is holding in a client trust account that should be distributed to a client or third party, and unidentified funds as monies for which the lawyer or firm cannot identify an owner.

New rules would include:

• If a lawyer, law firm or estate of a deceased lawyer can’t identify or locate the owner of funds in its Interest of Lawyers’ Trust Account, or IOLTA, or non-IOLTA trust account for a period of two years, it shall pay the funds to the Indiana Bar Foundation for use in accordance with Indiana’s IOLTA program.
• If, within three years of making a payment of unclaimed or unidentified funds to the bar foundation, the lawyer, law firm or deceased lawyer’s estate identifies and locates the owner of funds paid, the bar foundation shall refund the sum to the lawyer, law firm or deceased lawyer’s estate. The lawyer, law firm or deceased lawyer’s estate must then submit to the foundation a verification attesting that the funds have been returned to the owner.
• Reasonable efforts to locate the owner of unclaimed funds include, but aren’t limited to, mailing to the owner’s last address and contact by telephone and email. A lawyer, law firm or lawyer’s estate must certify those reasonable efforts to locate or identify the owner before remitting such funds to the Indiana Bar Foundation.
• A lawyer’s or law firm’s remittance to the bar foundation under this paragraph (h) shall not constitute misconduct or grounds for discipline if the lawyer or law firm exercised reasonable efforts to locate and distribute the funds and remitted the funds to the bar foundation in good faith.

Next, a proposed amendment to Trial Rule 23 concerns section (F), which address disposition of residual funds. The change would increase the amount of residual class action funds disbursed to the Indiana Bar Foundation for civil legal assistance purposes. Instead of 25% of the residual funds being disbursed to the foundation, it would be 50%.

The court invites public comment on the proposed amendments until 1 p.m. on March 1. Comments may be submitted online or mailed to Jennifer Bauer at Indiana Office of Court Services, 251 N. Illinois St., Suite 800, Indianapolis, 46204.