Can a lawyer sign a letter indemnifying a surety that issued a cost bond for the lawyer's out-of-state client?

Plain-English summary

This opinion, originally issued in 1970 and revised in 1993, addressed a lawyer who frequently represented out-of-state clients and was often asked by defendants' attorneys to file cost bonds under Section 57.011, Florida Statutes. A local bonding company agreed to issue nonresident-plaintiff cost bonds at the attorney's request, provided the attorney signed a letter of indemnification agreeing to indemnify the surety for any losses if the plaintiff failed to do so. The committee was asked whether that arrangement was permissible.

The committee noted that under Florida law an attorney cannot become a surety on any bond of his client in a judicial proceeding (Section 454.20, Florida Statutes, and Rule 2.060(f), Florida Rules of Judicial Administration), and that whether the proposed conduct violated the statute or rule was a question of law beyond its jurisdiction. On the ethics, it concluded there is no ethical distinction between an attorney becoming surety on his client's possible obligation to an opposing litigant and his becoming surety on the same possible obligation to a surety company that has bonded the client; in either case, the attorney acts as surety for his client, and the proposed scheme would be an attempt to do indirectly what the attorney is prohibited from doing directly. It added that the letter of indemnification appeared to go beyond the permissible limits of Rule 4-1.8(e), because the agreement required the attorney to reimburse the surety only after the plaintiff failed to do so.

Currency note

This opinion was originally issued in 1970 and revised April 23, 1993, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. The revised opinion applied Rule 4-1.8(e) on financial assistance to a client, together with Sections 57.011 and 454.20, Florida Statutes, and Rule 2.060(f), Florida Rules of Judicial Administration. Rule and statute numbering and content may since have changed. Treat this page as historical context, not current guidance. Verify against the current rules and statutes before relying on any specific requirement mentioned here.

Common questions

Q: Can a lawyer indemnify the bonding company that issued a client's cost bond?

A: Under this opinion, no. The committee found no ethical distinction between indemnifying the surety and standing surety for the client directly, calling it doing indirectly what is prohibited directly.

Q: Why did the indemnification letter exceed Rule 4-1.8(e)?

A: Because the agreement required the attorney to reimburse the surety only after the plaintiff failed to do so, which the committee viewed as financial assistance beyond what the rule permits.

Q: Did the committee decide the statutory question?

A: No. It said whether the conduct violated Section 454.20 or Rule 2.060(f) was a question of law beyond its jurisdiction.

Background and rules framework

The revised opinion applied Rule 4-1.8(e) of the Rules Regulating The Florida Bar, limiting a lawyer's financial assistance to a client, alongside the Florida statutes and judicial-administration rule barring a lawyer from acting as surety on a client's bond. The Model Rule analogue is Rule 1.8(e).

Citations and references

Rules of Professional Conduct:

• Rule 4-1.8(e) [financial assistance to a client]

Statutes:

• Section 57.011, Florida Statutes [nonresident cost bonds]
• Section 454.20, Florida Statutes [attorney as surety for a client]

Other authorities:

• Rule 2.060(f), Florida Rules of Judicial Administration [attorney as surety]

See also

No sibling opinions yet indexed.

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-70-8/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-70-8-Rev-1.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

FLORIDA BAR ETHICS OPINION
OPINION 70-8
Originally issued May 29, 1970
Revised April 23, 1993
Advisory ethics opinions are not binding.
It is not permissible for an attorney to give a letter of indemnification to a bonding company on behalf of an out-of-state plaintiff when the terms of the proposed indemnification agreement require the attorney to reimburse the surety only after the plaintiff has failed to do so. There is no ethical distinction between an attorney's becoming surety on his client's possible obligation to an opposing litigant and his becoming surety on the same possible obligation to a surety company which has become surety on the client's cost bond.
RPC: 4-1.8(e)
Statutes: F.S. § 57.011, 454.20
Rule: Fla.R.Jud.Admin. 2.060(f)
A member of The Florida Bar states that he frequently represents out-of-state clients and on many occasions is requested by defendants' attorneys to file cost bonds pursuant to Section 57.011, Florida Statutes. He further states that a local bonding company has agreed to issue nonresident plaintiff cost bonds upon the attorney's request, provided that, as attorney for plaintiff, he signs a letter of indemnification agreeing to indemnify that surety for any losses if the plaintiff fails to do so.
We are asked whether the proposed arrangement is permissible under the Rules of Professional Conduct.
Under Florida law an attorney cannot become a surety on any bond of his client in any judicial proceeding. Section 454.20, Florida Statutes; Rule 2.060(f), Florida Rules of Judicial Administration. Whether the conduct proposed by the inquiring attorney violates either the cited statute or rule is a question of law and hence beyond jurisdiction of this committee. However, the Committee is of the opinion that there is no ethical distinction between an attorney's becoming surety on his client's possible obligation to an opposing litigant and his becoming surety on the same possible obligation to a surety company which has become surety on the client's cost bond. In either case, the attorney is acting as surety for his client. The proposed scheme would, it seems, constitute an attempt to do indirectly that which the attorney is prohibited from doing directly.
Moreover, the giving of a letter of indemnification by the attorney seems to go beyond the permissible limits of Rule 4-1.8(e), as the terms of the proposed indemnification agreement require the attorney to reimburse the surety only after the plaintiff has failed to do so.