Florida Lawyer May Waive Clients Reimbursement of Costs in Limited Circumstances
A recent opinion from the Florida Bar Professional Ethics Committee allows lawyers to waive repayment of litigation expenses from non-indigent clients when the case is settled under limited circumstances. The Committee found that “where there has been no agreement for the inquirer to be unconditionally responsible for the costs at the outset of the representation, the cost “forgiveness” occurs after settlement, and the inquirer will receive no fees for the representation.”
Florida Model Rule 1.8(e) allows lawyers to front litigation costs of non-indigent clients only if they later recover those expenses by charging a contingent fee based on the outcome of the litigation. When working with indigent clients, Rule 1.8(e) allows lawyers to front expenses without later seeking or receiving repayment.
This opinion now creates flexibility for Florida lawyers to forgo repayment in non-indigent cases. The Committee’s opinion was prompted by an inquiry from a lawyer who represented a client in a negligence case. The parties reached a settlement; however, the settlement proceeds barely covered the litigation costs that the lawyer had fronted. The lawyer inquired about forgiving the costs owed so that the client would receive some of the settlement proceeds.
The Committee opined that Rule 4-1.8(e)’s prohibition did not preclude forgiving the costs because the Rule addresses agreements entered into at the beginning of the representation as to the client being responsible for the costs. The Committee explained, “the exception allowing a lawyer to advance costs of litigation and make those advanced costs “contingent on the outcome of the matter” would permit the inquirer to reduce the amount of the costs the inquirer seeks to be reimbursed from the recovery, as the recovery is insufficient to cover all medical bills and litigation costs.”
Read the opinion in its entirety here.