State of Arizona
The Arizona ethics committee in various opinions has rendered guidance to attorneys that litigation funding is both proper and ethical where client confidences and attorney independent judgment are maintained. They also advise that interest charges can be passed to a client upon full disclosure and written consent.
“Ethics opinion 01-07 09/2001; Advancing fund to clients; loans; costs and expenses of litigation; financial institutions; interest; confidentialy question presented. May the firm charge the interest on the line of credit as a client cost? If a lawyer obtains client consent and certain other conditions are met, a lawyer may set up a line of credit with a third-party lender to advance a client’s court costs and litigation expenses and pass on the line of credit’s interest charges to the client as a client cost. [ER 1.8(e)]”
Please reference your local state ethics rules.