Can attorneys fund a nonprofit loan program for accident victims secured by the victims' claims and repaid from case proceeds?
Apply this to your situation
This page answers the general question as of 1968. Ezel answers yours: whether it's allowed on your facts, under the current Florida Rules of Professional Conduct, with citations.
Plain-English summary
A lawyer proposed a nonprofit lending fund financed by contributions from attorneys to provide loans to accident victims. Loan applications would be processed through the attorneys representing the prospective borrowers on their accident claims. Each loan would be secured by an assignment of the claim and repaid out of the settlement proceeds.
The committee concluded, in a single sentence, that the plan would violate Canon 10.
Currency note
This opinion was issued in 1968, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. It applied the former Canon 10 on a lawyer acquiring an interest in litigation. A lawyer's provision of financial assistance to a client in connection with litigation is now addressed by Rule 4-1.8. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific requirement mentioned here.
Common questions
Q: Can lawyers pool money to lend clients funds against their pending cases?
A: Under this opinion, no. The committee found that a nonprofit fund financed by attorney contributions, lending to accident victims against assignments of their claims and repaid from case proceeds, violated Canon 10.
Q: Did it matter that the fund was nonprofit and routed through the clients' own attorneys?
A: The committee's conclusion did not turn on those features; it stated flatly that the plan, as described, violated Canon 10.
Background and rules framework
The opinion applied the former Canon 10, which addressed a lawyer acquiring an interest in the subject matter of litigation. A lawyer's financial assistance to a client in connection with pending or contemplated litigation is now addressed by Rule 4-1.8 of the Rules Regulating The Florida Bar; the Model Rule analogue is Rule 1.8.
Citations and references
Rules of Professional Conduct:
- Canon 10 [Canons of Professional Ethics; financial assistance now in Rule 4-1.8]
See also
- FL Bar Ethics Op. 70-8: Indemnifying a Client's Surety
- FL Bar Ethics Op. 70-13: Finder's Fees on Client Investments
Source
- Landing page: https://www.floridabar.org/etopinions/etopinion-68-15/
- Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-68-15-1.pdf
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
FLORIDA BAR ETHICS OPINION
OPINION 68-15
May 7, 1968
Advisory ethics opinions are not binding.
A nonprofit lending fund financed by contributions from attorneys for the purpose of providing loans to accident victims, which loans would be secured by assignment of the victims' claims and would be repaid from the proceeds of the victims' cases, would be improper.
Canon: 10
Chairman MacDonald stated the opinion of the committee:
A member of The Florida Bar proposes the institution of a nonprofit lending fund which would be financed by contributions from attorneys, and which would provide loans for accident victims. The proposal contemplates that the loans would be processed by applications through attorneys representing the prospective borrowers in connection with their accident claims. The loan would be secured by an assignment of this claim and would be repaid out of the proceeds of the settlement.
In our judgment this plan would be violative of Canon 10.
Get today's answer for your situation
You just read a 1968 opinion on this question. Ezel checks the current Florida Rules of Professional Conduct and answers your specific situation, with citations.
Opens in Ezel Pro. Every answer cites the rules it relies on.