MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 1990-09
Communication to Prospective Client of Willingness to Advance Cost and Expenses of Litigation
Your letter poses the following questions: (1) Is it appropriate for a lawyer to advise a prospective client of the lawyer's willingness to advance costs and expenses in class action litigation in which all fees and expenses will be awarded at the conclusion of the litigation? and (2) Can the lawyer advise the client that the lawyer will not look to the client for reimbursement of such costs and expenses if the litigation is unsuccessful
Rule 1.8(e) of the Maryland Rules of Professional Conduct provides:
(e) A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:
Prior to January 1, 1987, when the Maryland Rules of Professional Conduct became effective, the applicable rule was DR5-103(B). That provides:
While representing a client in contemplated or pending litigation, a lawyer shall not advance or guarantee financial assistance to his client, except that a lawyer may advance or guarantee the expenses of litigation, including court cost, the expenses of investigation, expenses of medical examination and costs of obtaining and presenting evidence, provided the client ultimately remains liable for such expenses.
The clear import of the change in the rules, therefore, is to permit lawyers to advance the costs of litigation without looking to the client for reimbursement. If that is your intent, we see no problem with your communicating that to prospective clients.