You Can Run, But You Can’t Hide Behind Your Check

A recent incident in Ohio prompted discussion over the ethical and legal issues associated with one client of a law firm funding another client’s lawsuit while maintaining complete anonymity.

A federal court required Zeiger Tiges Little & Lindsmith LLP, a law firm, to reveal to its client, Gregory Felsoci, the identity of another Zeiger client who chose to fund Mr. Felsoci’s lawsuit protesting a Libertarian Party’s candidate’s eligibility to run for governor.

The Libertarian Party submitted a discovery request, compelling Mr. Felsoci to reveal the identity of the person or party covering his legal fees, something unknown to Mr. Felsoci.

Basing their decision on Rule 1.8 (f) of the Ohio Rules of Professional Conduct, the court granted the Libertarian Party’s motion to compel, thereby requiring Mr. Felsoci to produce a document revealing the name of the mystery payer.

Rule 1.8 (f)(1) of the Ohio Rules of Professional Conduct prohibits a lawyer ethically from accepting compensation for representing a client from someone other than the client unless “the client gives informed consent.”

Thus, the court contended that Mr. Felsoci had an enforceable right to demand any information he deemed necessary in order to provide informed consent to the fee arrangement, and his counsel was legally obligated to provide him with such information on demand.  The court stated that counsel would not be violating their duty of confidentiality to the third party payer since fee payment and the identity of a client is usually not protected by attorney-client privilege.

In almost every situation where one person pays the legal fees of another, the fact of that arrangement is fair game for disclosure and no privilege to withhold that fact exists. (Libertarian Party of Ohio v. Husted, 2014 BL 223949, S.D. Ohio, No. 2:13-cv-953, 8/12/14).

For more information visit: Libertarian Party of Ohio v. Husted

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