The Ethical Rules Governing Florida Lawyers Who Help Their Clients Find Litigation Financing
When a client retains an attorney for representation in a lawsuit, he will, of course, rely on the attorney’s judgment and advice regarding what is necessary to bring the case to a successful conclusion. If the client lacks the funds to cover litigation or living expenses while the case is pending, the attorney may wish to help, and the client may need that help. But, in Florida, if helping means facilitating a litigation financing agreement, the attorney must be careful in how they gives that help if they wants to comply with their ethical obligations to avoid conflicts of interest.
Loyalty to the client is one of a lawyer’s most fundamental duties. This duty of loyalty means that a lawyer must always serve the client’s interests. This means that, in almost every situation, a lawyer may not engage in any transactions with the client, apart from the agreement to provide representation. Being on the other side of a client in a transaction could give the lawyer interests that are adverse to the client and could create a conflict of interest.
This duty of loyalty can be implicated when the lawyer participates in the client’s efforts to obtain litigation financing. The lawyer cannot do anything that would serve the interest of the lender if it would be contrary to the client’s interest. In general, lawyers should try to keep an arm’s-length relationship with the agreement between their client and the lender. Thus, according to Florida legal ethics authorities, “a lawyer may suggest to a client where the client may try to obtain financial help for individual needs. . ., but the lawyer should not become part of the loan process.” Florida Ethics Opinion 75-24. In particular, those authorities have offered the opinion that lawyers should not inform litigation finance companies about clients who might benefit from a non-recourse litigation financing agreement. Id.
The lawyer should also be careful about providing a litigation finance company with information or opinions about the prospects of the client’s case. If the litigation finance company seeks confidential information that could reflect on those prospects, such as medical or accident reports, the attorney can furnish that information, but only if the client gives informed consent after the lawyer discloses the benefits and detriments of such disclosure.
But there are some things that the lawyer should not do under any circumstances. The lawyer should not give any privileged or work product information to the litigation finance company to avoid any suggestion that the attorney-client or work-product privileges have been waived. And the attorney should not tell the litigation finance company his own opinion of what the case might be worth.
As long as the attorney is mindful of the potential for conflicts of interest, and as long as he avoids any such conflicts, the attorney can provide help to his client in the process of getting litigation financing. Within the proper ethical boundaries, lawyers and litigation finance companies can each make productive contributions to a client’s ability to recover for his injuries.
Works Cited:
Florida Bar Association, Opinion 00-3 (March 15, 2002)
