May a contingent fee contract waive advanced litigation costs if there is no recovery, or leave that issue unstated?

Plain-English summary

A lawyer for a client who was not indigent asked how a contingent fee contract could address litigation costs advanced by the firm when a case produced no recovery. The question presented automatic waiver, optional waiver, and a contract silent about no recovery.

The answer permits both waiver provisions under Rule 4-1.8(e)(1). It rejects a contract that is silent about costs if there is no recovery because that would not adequately communicate the fee arrangement to the client.

Currency note

This opinion was issued in 1997, before Missouri's 2007 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context and verify current rules before relying on it.

Common questions

Q: May the contract say the client owes no advanced costs if there is no recovery?

A: Yes. The opinion approves that term under Rule 4-1.8(e)(1).

Q: May the firm reserve the option to waive those costs?

A: Yes. The answer also approves a provision allowing an optional waiver.

Q: May the contract say nothing about costs if there is no recovery?

A: No. The opinion says that silence would not adequately communicate the fee arrangement.

Background and rules framework

The opinion applies Rule 4-1.8(e)(1) to advanced litigation costs in a contingent fee matter. It separately addresses whether the fee contract adequately tells the client what happens to those costs without a recovery.

Citations and references

Missouri Rules of Professional Conduct:

• Rule 4-1.8(e)(1)

See also

• Missouri Informal Op. 980235: Litigation Costs Without Recovery
• Missouri Formal Op. 119: Litigation Expense Advances

Source

• Landing page: https://mo-legal-ethics.org/informal-opinion/970123/
• Rule revision reference: Missouri Informal Opinion 20030007

Original opinion text

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

QUESTION: Attorney represents a client who is not indigent. The client´s obligation to pay attorney fees is contingent upon recovery. Question 1. May the employment contract with the client provide that, if there is no recovery, the client will not be responsible for repayment of the litigation costs and expenses advanced by the law firm? Question 2. May the employment contract provide that, if there is no recovery, the firm may, at its option, waive its claim against the client for reimbursement of costs and expenses? Question 3. May the parties enter into a fee contract which provides that, upon recovery, the client is responsible for litigation costs and expenses, but which employment contract is totally silent as to what occurs if there is no recovery? ANSWER: Question 1 and 2. Yes, see Rule 4–1.8(e)(1). Question 3. No. This would not constitute adequate communication with the client regarding the fee arrangement.