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On December 6, 2012, a jury awarded $109 million in damages, the largest award in Allegheny County history, in a case involving a woman who died three days after being electrocuted by a fallen power line. On a sunny day in June 2009, Carrie Goretzka was at home when the power in her house went out. She looked outside and saw the trees in her backyard caught fire. Seeing sparks from a pole that supported a power line, Goretzka went outside to get her cell phone to call 911. While she was outside

State of Wisconsin E-92-3 A contingent fee contract as collateralfor a personal loan to a lawyerFactsAssume Attorney A, a sole practitioner, and an individual, Client B, execute a valid personal injury written contingency agreement under SCR 20:1.5(c).Assume further that the written agreement provides for an attorney’s lien consistent with SCR 20:1.8(j)(1) and (2). Disregarding the value of the contingency case or the contingent fee, may Attorney A ethically offer, tender or negotiate the attor

District of Columbia Ethics Opinion RULES OF PROFESSIONAL CONDUCT, RULE 1.8(A), (D) AND COMMENTS 1, 3, AND 5 1. A lawyer may obtain a loan from a lending company to fund litigation expenses, provided that the terms of the loan are fair, the client has an opportunity to consult with another attorney on the issue, and that the client consents in writing to the loan. 2. Whether or not the interest on the loan may ethically be passed on to the client was not addressed in these Rules. To date we hav

State of Washington The inquirer asks if it is ethical for a lawyer, in a contingency fee case, to charge interest on costs and expenses of litigation advanced on behalf of the client. The committee opined that a lawyer may, in representing a client on a contingency fee matter, provide in the written fee agreement at the commencement of the representation that costs advanced by the lawyer will accrue interest after a stated period from the date of advancement. The interest rate charged must be

State of Utah Utah Ethics Advisory Opinion CommitteeOpinion No. 02-01Issued February 11, 2002 Issue: Do the Utah Rules of Professional Conduct preclude a Utah lawyer from financing litigation costs through a loan from a third-party lending institution, if (a) the lawyer is obligated to repay the loan and (b) the client, by separate agreement with the lawyer, is obligated to reimburse the lawyer for such costs? Conclusion: The Utah Rules of Professional Conduct do not preclude such litigation-fi

State of Texas THE TEXAS CENTER FOR LEGAL ETHICS AND PROFESSIONALISM, OPINION 465 1. It is ethical for an attorney to take a loan from a third party funding company cover litigation expenses, or to fund his law practice. 2. It is ethical for that attorney, if successful in the litigation, to pass on any interest and charges on any such loan to the client as an appropriate litigation expense, as to the portion of the loan which funded that client’s case. Special State of Texas Caveats: In coming

State of Tennessee Advisory Ethics Opinion 98-A-659Board of Professional Responsibility of the Supreme Court of Tennessee (July 9, 1989), draws a similar conclusion from similar facts described in the Utah inquiry. The Board concludes “a lawyer may advance or guarantee certain expenses” by means of “a lending company or recommending such services to clients.” Link to full opinion not available online

State of South Dakota Ethics Opinion 2003-6Rules: 1.2, 1.16, 8.4Subject: Champerty and MaintenanceSummary: Law Firm is prohibited from entering into contractual relationship with client and third party for cash advance by third party prior to conclusion of dispute. FACTSLaw Firm represents client in a dispute concerning injuries sustained from an unknown event. Brand X is an out of state company that provides cash advances on pending personal injury claims. Before such advances are made, Brand

State of South Carolina Ethics Advisory Opinion 94-04Upon the request of a member of the South Carolina Bar, the Ethics Advisory Committee has rendered this opinion on the ethical propriety of the inquirer’s contemplated conduct. This Committee has no disciplinary authority. Lawyer discipline is administered solely by the South Carolina Supreme Court through its Commission on Lawyer Conduct. A number of attorneys in South Carolina have received communications from a company that is engaged in t

State of Rhode Island OPINION 94-42June 22, 1994The inquiring attorney states that the law firm at which he/she is employed has obtained a line of credit from a bank. The bank has requested that the law firm grant a security interest in the firm’s accounts receivable and that the firm provide the bank with a list of the accounts receivable including the names of clients, addresses and amounts owed by them. The attorney seeks Panel advice under these circumstances in light of Rule 1.6 “confident

Commonwealth of Pennsylvania Ethics Opinions ETHICS OPINION 2003-15 1. It is ethical for an attorney to borrow funds from a third party funding company to cover litigation expenses, or to fund his law practice. However, in this case the Ethics Opinion requires that ” ..the costs [be] repaid, plus additional fees, only if the case were successfully concluded and funds were derived by the attorney.” Moreover, “[i]f there is a recovery, the only claim by the Funding Company is against the attorney

State of Oregon FORMAL OPINION NO. 2005-97Questions:1. May Lawyer charge 18% annual interest if a client expressly agrees to it as part of the fee agreement?2. What interest rate may Lawyer charge in the absence of an interest rate agreement?3. If no agreement concerning a charge of 18% is reached, may Lawyer amend the fee agreement to include an 18% per annum charge by stating on a bill sent to the client that, in the future, the client must begin to pay 18% per annum if payment is not receive

State of Ohio ETHICS OPINION 2001-3 1. A lawyer may obtain a loan from a third party lending company provided that the loan is not secured by the client´s interest in any settlement or judgment. This provision does not prohibit the lending company from securing the loan through the borrowing attorney´s fee on the case. The client should also be informed of the loan and his or her consent should be obtained by the borrowing attorney/firm. 2. It is proper for the borrowing attorney to deduct the

State of North Carolina 2006 Formal Ethics Opinion 12October 20, 2006Obtaining a Loan to Fund Litigation Costs Opinion explores the circumstances under which a lawyer may obtain litigation funding from a financing company. Inquiry #1: ABC Litigation Funding (hereinafter “ABC”) is a company that offers non-recourse loans to personal injury lawyers who need to borrow funds for expenses advanced in contingency cases. Lawyer is interested in obtaining financing for a large personal injury case for

State of New York ETHICS OPINION 754-2/25/02 1. It is ethical for an attorney to borrow funds from a third party lender to cover litigation expenses, or to fund his law practice. 2. The interest charged by the lender to a lawyer on the funds borrowed by the lawyer to fund litigation expenses may be passed on to the client as a legitimate litigation expense if certain conditions are met: A. the client must remain ultimately liable for expenses paid under DR 5-103(b)(1), B. the lawyer can not hav

State of New Jersey ETHICS OPINION 603 1. It is ethical for an attorney to borrow funds from a third party lending company to cover litigation expenses, or to fund his law practice. 2. It is ethical for that attorney to pass on to the client, as an appropriate litigation expense, any interest and charges on any such loan, to the extent of that portion of the loan which funded that client´s case. New Jersey Ethics Opinion 603 is copied in its entirety below: The inquirer asks our opinion concern

State of New Hampshire PRACTICAL ETHICS ARTICLE: MAY 21, 1987 The New Hampshire Bar authorities do not officially address the ethics of an attorney borrowing funds from a third party funding company. However, Practical Ethics Article: May 21, 1987 (“Law Firm Use of Outside Services Providers”) acknowledges and supports opinions that have condoned attorney borrowing from financial companies to fund litigation. Excerpts from Massachusetts Ethics Opinion 83-7: The Article stresses the caveat that

State of Nevada Formal Opinion No. 36January 7, 2007 QUESTIONS 1.  Do the Nevada Rules of Professional Conduct preclude an attorney from financing litigation costs through a loan obtained from a third-party lending institution in which the attorney is obligated to repay the loan and the client is in turn obligated to reimburse the attorney for litigation costs? 2.  May the separate agreement requiring the client to be responsible for litigation expenses also require the client to reimburse coun

State of Nebraska Nebraska Ethics Advisory Opinion for Lawyers No. 00-2An opinion of the advisory committee has been requested as to whether it is ethical for a lawyer to refer a client to a business which advances money to the client for litigation or living or living expense purposes in exchange for an equity position in the client’s case. The lender will expect a lien on the proceeds of the lawsuit or the settled claim and above-market interest plus service fees. Restatement of Facts: The A

State of Missouri Maintaining the Integrity of the Profession Misconduct Opinion Number: 20030022 – Rule Number: 8.4QUESTION: Attorney’s firm proposes to borrow money from a non-lawyer for the purpose of funding expenses in mass tort litigation. The loan will be on a non-recourse basis. The firm’s duty to repay would be based on successful prosecution of the cases as a whole, but not on the recovery of any individual case. ANSWER: Generally, it is permissible for the law firm toborrow money fro

State of Minnesota Vol. 61, No. 5 | May/June 2004 Presettlement Funding Agreements: Benefit or BurdenBy Kenneth L. Jorgensen Generally, lawyers are prohibited from providing financial assistance to clients. See Rule 1.8(e), Minnesota Rules of Professional Conduct. An exception to this rule permits lawyers to advance the costs and expenses of litigation and make the repayment contingent upon the outcome of the client’s case. Although lawyers cannot directly lend money to clients, another exception

State of Michigan RI-336October 7, 2005SYLLABUS The Michigan Rules of Professional Conduct do not preclude a lawyer from financing litigation costs through a loan from a third-party lending institution provided the lawyer discloses to the client the terms and conditions of the loan and the client consents in a written contingent fee agreement, upon conclusion the client receives a written statement reflecting interest advanced by the lawyer and charged to the client as an expense in the matter,

State of Arizona Comments: 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. Excerpts from “Ethics opinion 01-07 09/2001; Advancing fund to clients; loans; costs and expenses of litigation; financial institutions; interest; confide

State of Maryland Ethics Docket 98-23 Charging Client for the Cost of Bank Loan for Advances and/or Charging Interest on Advances for Use of Attorney’s Funds. In your letter you state that your standard contingent fee agreement provides that the client assumes a non-contingent responsibility for the court costs and expenses of litigation incurred on the client’s behalf. Such costs and expenses are advanced by you, and they are funded by utilizing your bank line of credit or from your own funds.

In 1989, when Tom Rogers first became a shareholder and head of the business practice at Blasingame Burch Garrard Ashley, P.C. (BBGA), the Athens-based firm was involved in insurance and mass tort defense, business and real estate. With the loss of a major asbestos client in the early 2000s the firm underwent a massive transformation—shifting its defense-sided practice to plaintiffs’ litigation. Now, in 2016, BBGA has garnered national recognition as an elite plaintiffs’ mass tort firm due to it

Commonwealth of Massachusetts ETHICS OPINION 83-7 1. It is ethical for an attorney to borrow funds from a third party lending company to cover litigation expenses, or to fund his law practice Excerpts from Massachusetts Ethics Opinion 83-7: Facts: The committee has received two inquiries. In the first, an attorney who represents the plaintiff in a personal injury case inquires if he may borrow funds from a chartered lending company to help defray the costs and expenses of the litigation, suppor

State of Maine ETHICS OPINION #177 1. It is ethical for an attorney to borrow funds from a third party lending company to cover litigation expenses, or to fund his law practice The costs, fees and interest from the litigation loan may be passed on to the client, provided that: A. The interest rate is reasonable, and the lawyer does not profit financially from the third party lending arrangement. B. The lawyer must explain the terms of the loan to the client. C. Client confidences may not be di

State of Kentucky KBA E-42011/15/02Subject: Lawyer Borrowing Litigation Costs and Granting Lender a Security Interest in Lawyer’s Contingent Fee Question 1: May a lawyer who represents a client under a contingent fee contract borrow funds from a lending institution to cover litigation expenses?Answer: Yes, subject to the cautions set forth below. Question 2: May the lawyer pass the interest on the loan (along with other related fees) on to the client by deducting them from the proceeds of a jud

Commonwealth of Louisiana Ethics Opinions CHITTENDEN V. STATE FARM MUT. AUTO. INS. CO., 788 SO. 2D 1140 ( LA.), REH. DEN., 2001 LEXIS 2154 ( LA. 2001) 1. It is ethical for an attorney to borrow funds from a third party lending company to cover litigation expenses, or to fund his law practice. 2. The cost of the fees and interest associated with the loan may be passed to the client provided that the client consents in writing to the loan and its charges/interest rate. Please reference your loca

State of Kansas OPINION No. 94-08; August 16, 1994Topic: Assignment of lawyer’s accounts receivable Digest: The proposal to assign client accounts to a bank in return for a discounted loan may be permissible but amounts to self-dealing for the attorney and is not permissible under the Model Rules unless there is consent, after full disclosure, by the client, which under Kansas case law may require independent advice of counsel. We feel such an assignment, if undertaken, should be restricted to