Can a lawyer agree to pay the attorney's fees and costs assessed against the client under the offer-of-judgment statute if the client loses?

Plain-English summary

A member asked whether, as attorney for a plaintiff, he could agree with his client that if they went to trial, lost, and became subject to attorney's fees and costs under a defendant's offer of judgment (section 768.79, Florida Statutes), he would pay those fees and costs to the defendant's insurer. Under the statute, a plaintiff who refuses a settlement offer must pay the defendant's reasonable costs and fees if the judgment is one of no liability or is at least 25 percent below the offer; the assessment occurs only at the conclusion of the litigation.

The committee noted that the Supreme Court of Florida had described the offer-of-judgment procedure as one by which parties are sanctioned for failing to accept bona fide settlement offers (The Florida Bar re: Amendment to Rules), and that Goode v. Udhwani described the statute's purpose as a penalty for not acting reasonably and in good faith in settling lawsuits.

The committee concluded that the proposed conduct would be prejudicial to the administration of justice in violation of Rule 4-8.4(d) because it would defeat the purpose of the statute. It drew on a New York City Bar formal opinion finding that an agreement requiring a client to pay Rule 11 sanctions imposed on the lawyer was unethical because it defeated the rule's purpose and improperly shifted liability; here, the deterrent effect of the offer-of-judgment statute would be defeated if lawyers could insulate clients from the financial liability. The committee added that the assessed costs and fees were not the type of "financial assistance" contemplated by Rule 4-1.8(e), and concluded the proposed conduct was ethically impermissible.

Currency note

This opinion was issued in 1997, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could the lawyer agree to cover the client's offer-of-judgment fees if they lost?

A: No. The committee concluded the agreement was prejudicial to the administration of justice under Rule 4-8.4(d) because it would defeat the deterrent purpose of section 768.79.

Q: Was this treated as permissible advancing of litigation costs under Rule 4-1.8(e)?

A: No. The opinion concluded that costs and fees assessed under the offer-of-judgment statute were not the type of "financial assistance" contemplated by Rule 4-1.8(e).

Background and rules framework

The opinion interpreted Rule 4-8.4(d) (conduct prejudicial to the administration of justice, Model Rule 8.4(d)) and Rule 4-1.8(e) (financial assistance to a client in litigation, Model Rule 1.8(e)), against section 768.79, Florida Statutes, and Florida Rule of Civil Procedure 1.442 governing offers of judgment.

Citations and references

Rules of Professional Conduct:

• Model Rule 8.4(d) / Fla. Rule 4-8.4(d) (conduct prejudicial to the administration of justice)
• Model Rule 1.8(e) / Fla. Rule 4-1.8(e) (financial assistance to a client)

Statutes:

• Fla. Stat. § 768.79 (offer of judgment / demand for judgment)
• Fla. R. Civ. P. 1.442 (proposals for settlement)

Cases:

• The Florida Bar re: Amendment to Rules, 550 So. 2d 442 (Fla. 1989)
• Goode v. Udhwani, 648 So. 2d 247 (Fla. 4th DCA 1995)

Other opinions cited:

• New York City Bar Formal Op. 1989-3

See also

• FL Bar Ethics Op. 96-1: Absorbing Client Litigation Costs
• FL Bar Ethics Op. 00-3: Non-Recourse Litigation Funding
• FL Bar Ethics Op. 04-2: Practice-Restriction Clauses

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-96-3/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-96-3-1.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 96-3
February 15, 1997
Advisory ethics opinions are not binding.
An attorney may not ethically agree to pay fees and costs assessed to a client pursuant to
the Offer of Judgment statute.
RPC: Rule 4-8.4(d), Rule 4-1.8(e)
Cases: The Florida Bar re: Amendment to Rules, 550 So. 2d 442 (Fla. 1989), Goode v.
Udhwani, 648 So.2d 247 (Fla. 4th DCA 1995)
Opinions: New York City Bar Formal Opinion 1989-3
Misc: Florida Statute 768.79, Florida Rule of Civil Procedure 1.442
A member of the Florida Bar requests an advisory ethics opinion regarding the lawyer’s
ability to agree to pay costs and fees assessed against the lawyer’s client in accordance with
section 768.79, Florida Statutes. Specifically, the inquiring attorney has asked the following
question:
Whether or not I, as attorney for plaintiff, may enter into an agreement with my
client that if we go to trial and if we are unsuccessful and become subject to
sanctions of attorney’s fees and costs pursuant to the first defendant’s Offer of
Judgment, may I, as the attorney, agree to pay my clients’ attorney’s fees and
costs to the defendant’s insurer if we lose?
Pursuant to section 768.79 of the Florida Statutes (hereinafter, the “statute”), a plaintiff
who refuses an offer of settlement made by the defendant must pay reasonable costs, including
attorney’s fees, incurred by the defendant from the date of the offer if the judgment is one of no
liability or the judgment obtained by the plaintiff is at least 25 percent less than the offer. Under
the statute, the assessment of costs and fees against a client will occur, if at all, only at the
conclusion of the litigation. The statute provides that a court must either set off such costs and
fees against any award obtained by the client, or, if the client obtains an award less than the
amount of the costs and fees, the court will enter a judgment against the plaintiff for the amount
of costs and fees not covered by the plaintiff’s award.
Referring to Florida Rule of Civil Procedure 1.442, which requires parties to comply with
the procedures set forth in section 768.79, the Supreme Court of Florida has described the
procedure governing offers of judgment as one “by which parties are sanctioned for failure to
accept bona fide offers of settlement prior to trial.” The Florida Bar re: Amendment to Rules,
550 So. 2d 442 (Fla. 1989). Additionally, in Goode v. Udhwani, 648 So. 2d 247 (Fla. 4th DCA
1995), the court stated that, “The purpose of section 768.79 was to serve as a penalty if parties
did not act reasonably and in good faith in settling lawsuits.”
The committee concludes that the proposed conduct would be prejudicial to the
administration of justice, in violation of Rule 4-8.4(d), because it would defeat the purpose of the
Offer of Judgment statute. In Opinion 1989-3, the New York State Bar Association Committee
on Professional Ethics found that an agreement requiring a client to pay Rule 11 sanctions
imposed upon a lawyer for filing non-meritorious claims was unethical because it defeated the
purpose of the Rule and improperly shifted liability to the client. [Editor’s note: the correct
citation is New York City Bar Formal Opinion 1989-3]. Similarly, the deterrent effect of the
Offer of Judgment statute would be defeated if lawyers could insulate their clients from potential
financial liability.
Furthermore, costs and fees assessed pursuant to this statute are not the type of “financial
assistance” contemplated by Rule 4-1.8(e).
Based upon the foregoing, the committee concludes that the proposed conduct is ethically
impermissible.