Letters Blogatory

The Blog of International Judicial Assistance
By Ted Folkman

Editorial: The ABA Should Not Amend Model Rule 1.8(e)

The American Bar Association is contemplating an amendment to Model Rule of Professional Conduct 1.8(e), which today forbids lawyers to “provide financial assistance to a client in connection with pending or contemplated litigation,” with exceptions for advancing “court costs and expenses of litigation” and, in the case of indigent clients, paying “court costs and expenses of litigation” outright. The amendment would make a third exception, in cases where the client is indigent and the lawyer is working pro bono or “through a nonprofit legal services or public interest organization” or a “law school clinical or pro bono program.” Under the new exception, the lawyer “may provide modest gifts to the client for food, rent, transportation, medicine and other basic living expenses if financial hardship would otherwise prevent the client from instituting or maintaining the proceedings or from withstanding delays that put substantial pressure on the client to settle.” The lawyer may provide such assistance “even if the representation is eligible for fees under a fee-shifting statute.”

I have had the unhappy experience of learning, midway through a major cross-border litigation, that counsel for the plaintiffs were paying the living expenses and other expenses of their extremely poor clients in a mass tort case in circumstances that, in my view at least, gravely threatened the integrity of the proceedings. It felt like a punch to the gut. I’m not going to write about the facts of the case, but if you want to read some eye-opening, publicly-filed papers that illustrate the problem, take a look at these—you will not be disappointed:

  1. My motion for relief
  2. Plaintiffs’ opposition
  3. My reply brief
  4. Transcript of hearing

You may say that the danger of corruption that can occur in ordinary contingent fee litigation won’t occur in the cases within the exception to the rule, because it only applies to pro bono work. But the exception for cases where attorneys’ fees can be awarded makes that argument untenable, and in any event the argument underestimates the importance lawyers’ non-monetary motivations and the way in which money can corrupt the testimony of clients in service of the lawyer’s interest in, for example, advancing a particular legal theory, whether or not the lawyer is being paid.

In short, I think this amendment would be a big mistake, and that if it is adopted, states should nevertheless adhere to the traditional rule.

Ted Folkman

4 responses to “Editorial: The ABA Should Not Amend Model Rule 1.8(e)”

  1. Jeffrey Van Detta

    Ted, do you oppose the Rule change for law-school clinical programs, too? Are all non-profits the same for these purposes in your view?

    Reply
    1. Ted Folkman

      I do oppose it for all programs. The problems are the same both on the lawyer’s side and on the client’s side. On the client’s side, the risk is that the client will feel he or she is being paid to say things that will improve the chances of the case succeeding. That was very clear in the case I gave in my example, which was of course an extreme case, but I think the same dynamic would be at work here, though less starkly. On the lawyer’s side, the lawyer or law school may not be motivated by money (except of course in fee shifting cases—do you think law school clinics should be able to give gifts to client in those cases?), but clinics have agendas and the lawyers’ and students’ incentives can be distorted by the desire to carry out the agenda in the same way as a private practice lawyer’s incentives can be distorted. This isn’t a criticism of law school clinics—I’m a proud alumnus of one and think they often do great work.

      Reply
  2. Antonio Di Stefano

    I advanced some living expenses in a case I handled in low-bono, to a mother abandoned in a foreign country with two infants, because I knew she survived mainly on charity of the local population. Never perceived any problem with it. The arrangement was she would paying me back when she got distribution of property back in the US. I checked and confirmed that such assistance is legal under California law, where I am licensed. But it is not allowed under Oklahoma law where her divorce and her property are located. Civil litigation in most states has become so expensive that even the salaried middle class can hardly afford it. Rules that categorically forbid assistance only help ensure that the indigent and the unfortunate are denied any resources to protect their rights. And they most certainly won’t be able to do that if they must struggle to even stay alive.

    Reply
    1. Ted Folkman

      Thanks for the comment, Antonio! The proposed rule change only addresses pro bono representation, so I don’t think that it does anything really to solve the problem of access to justice, which, as you say, is indeed a big problem. The clients the rule change is meant to help already have a free lawyer. The question is whether paying their rent, say, goes too far in encouraging claims that would not otherwise be brought.

      Reply

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