I advanced a medical expert's fee on my client's behalf and billed the client, who hasn't paid. My fee agreement lets me charge interest on overdue amounts. Can I charge the client interest on the unpaid expert fee?
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This page answers the general question as of 2007. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
The inquiring attorney hired a medical expert to review a client's medical records; the expert's fee had to be paid before the expert would provide a report, so the attorney paid the fee on the client's behalf and billed the client, who had not paid. The attorney's written fee agreement with the client stated the client was responsible for all costs advanced by the attorney, that such costs were due upon the attorney's payment, and that the attorney could charge interest on overdue amounts. The attorney asked whether charging interest on the unpaid expert fee was proper.
The panel concluded the fee agreement made the client responsible for advanced costs and permitted interest on unpaid amounts, and that the Rules of Professional Conduct do not prohibit charging interest on the unpaid expert-fee bill, so long as the attorney complies with the laws governing the charging of interest; the panel characterized such charges as a reasonable consequence of nonpayment. It cited its own prior opinion, R.I. Sup. Ct. Ethics Advisory Panel Op. 98-06 (1998), which held that charging interest on unpaid legal bills is proper if the lawyer complies with interest law and, absent a prior written agreement, gives the client advance notice and a reasonable opportunity to pay without incurring interest.
In practice
The opinion holds that, under the Rhode Island rules as they stood at the time of the opinion, a lawyer may charge a client interest on an unpaid, attorney-advanced expert fee when the written fee agreement makes the client responsible for advanced costs and expressly permits interest on overdue amounts, so long as the lawyer complies with the laws governing the charging of interest. Consistent with the panel's Op. 98-06, the opinion treats such charges as a reasonable consequence of nonpayment, provided the client either agreed in writing in advance or received advance notice and a reasonable opportunity to pay without interest.
Common questions
Q: Can I charge my client interest on an expert fee I advanced and billed, once the client falls behind?
A: Yes, per this opinion, if the written fee agreement makes the client responsible for advanced costs and permits interest on overdue amounts, and the attorney complies with the laws governing the charging of interest.
Q: What if there's no written agreement addressing interest?
A: The panel's cited prior opinion, Op. 98-06, requires that absent a prior written agreement, the lawyer give the client advance notice and a reasonable opportunity to pay before interest is charged.
Q: Does this apply only to attorney's fees, or also to costs like expert fees advanced by the lawyer?
A: This opinion applies the same interest-charging analysis to a cost advanced by the attorney on the client's behalf (the expert's fee), not just to fees for the attorney's own services.
Background and rules framework
The opinion applies Rule 1.5 (Fees), reasoning from the parties' written fee agreement, which made the client responsible for costs advanced by the attorney and permitted interest on overdue amounts. It relies on the panel's own R.I. Sup. Ct. Ethics Advisory Panel Op. 98-06 (1998) for the governing standard: interest on unpaid bills is proper if the lawyer complies with interest law, and, absent a prior written agreement, gives the client advance notice and a reasonable opportunity to pay without interest.
Citations and references
Rules of Professional Conduct:
- MR 1.5 (Fees) / RI Rule 1.5
Other opinions cited:
- R.I. Supreme Court Ethics Advisory Panel Op. 98-06 (1998): charging interest on unpaid legal bills is proper if the lawyer complies with interest law and, absent a prior written agreement, gives clients advance notice and a reasonable opportunity to pay without interest
See also
- Colorado Bar Association Formal Op. 66: Imposition of Interest or Finance Charges on Client Accounts
- State Bar of California Op. 1980-053: Charging Interest on Past-Due Receivables With Informed Consent
Source
- Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
- Original PDF: https://www.courts.ri.gov/Opinions/EAP%202007-05.pdf
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
Final
Rhode Island Supreme Court Ethics Advisory Panel
Opinion No. 2007-05 Request No. 931
Issued March 8, 2007
Facts
The inquiring attorney hired a medical expert to review a client's medical records.
The expert's fee had to be paid before the expert provided a report. The inquiring attorney
paid the fee on behalf of the client and billed the client. The client has not paid the
expert's fee. The inquiring attorney wants to charge interest on the amount due. A written
fee agreement between the client and the inquiring attorney states that the client is
responsible for payment of all costs associated with advancing the case and that payments
of those costs that are advanced by the inquiring attorney are due from the client upon
payment by the attorney. The fee agreement also provides that the inquiring attorney may
charge interest on overdue amounts.
Issue Presented
The inquiring attorney asks whether it is proper to charge interest to the client on
the unpaid expert's fee.
Opinion
The Rules of Professional Conduct do not prohibit the inquiring attorney from
charging the client interest on the unpaid expert's fee provided the inquiring attorney
complies with laws governing the charging of interest.
Reasoning
The fee agreement provides that the client is responsible for costs, and that costs
that are advanced by the inquiring attorney are due upon payment by the inquiring
attorney. The fee agreement also provides for interest on unpaid amounts. The Rules of
Professional Conduct do not prohibit the inquiring attorney from charging the client
interest on the unpaid bills for the medical expert's services, provided that the inquiring
attorney complies with laws governing the charging of interest. Such charges are the
reasonable consequences of nonpayment. See R.I. Sup. Ct. Ethics Advisory Panel Op. 98-
06 (1998) (charging interest on unpaid legal bills is proper if lawyer complies with laws
governing the charging of interest and if, in the absence of a prior written agreement,
clients receive advance notice and a reasonable opportunity to pay without interest.)
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