WSBA 2001

Can a lawyer charge a contingency-fee client interest on litigation costs the lawyer advances?

Short answer: Yes, with conditions. The committee concluded that a lawyer may provide in the written fee agreement, at the start of a contingency-fee representation, that advanced costs accrue interest after a stated period; the rate must be reasonable under RPC 1.5 and non-usurious.

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This page answers the general question as of 2001. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.

Currency note: this opinion is from 2001
Subsequent statutory amendments, court decisions, or later opinions or rule amendments may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Disclaimer: Advisory only. Not binding precedent.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The inquirer asked whether it was ethical for a lawyer, in a contingency-fee case, to charge interest on the costs and expenses of litigation advanced on the client's behalf.

The committee concluded that a lawyer may, in representing a client on a contingency-fee matter, provide in the written fee agreement at the commencement of the representation that costs advanced by the lawyer will accrue interest after a stated period from the date of advancement. It added that the interest rate charged must be reasonable under RPC 1.5 and non-usurious.

Currency note

This opinion was issued in 2001, before the Washington State Bar Association'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 Treat this page as historical context, not current guidance.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: Can a lawyer charge interest on litigation costs advanced in a contingency-fee case?

A: The committee concluded that a lawyer may provide, in the written fee agreement at the start of the representation, that advanced costs will accrue interest after a stated period from the date of advancement.

Q: Are there limits on the interest rate?

A: Yes. The committee said the interest rate charged must be reasonable under RPC 1.5 and non-usurious.

Q: Does the arrangement have to be in writing?

A: The committee framed the permitted arrangement as one set out in the written fee agreement at the commencement of the representation.

Background and rules framework

The opinion applies Washington RPC 1.5 (fees; the requirement that a lawyer's fee be reasonable; corresponding to Model Rule 1.5) to interest charged on advanced litigation costs in a contingency-fee matter. The committee tied the permitted arrangement to a written fee agreement made at the outset and to a rate that is both reasonable under RPC 1.5 and non-usurious. The opinion reflects Washington's pre-2006 rule numbering.

Citations and references

Rules of Professional Conduct:

  • Model Rule 1.5 / Washington RPC 1.5 (fees; reasonableness)

See also

Source

Original opinion text

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

Advisory Opinion: 1960
Year Issued: 2001
RPC(s): RPC 1.5
Subject: Interest on costs of litigation advanced to client

The inquirer asks if it is ethical for a lawyer, in a contingency fee case, to charge interest on costs and expenses of litigation advanced on behalf of the client. The committee opined that a lawyer may, in representing a client on a contingency fee matter, provide in the written fee agreement at the commencement of the representation that costs advanced by the lawyer will accrue interest after a stated period from the date of advancement. The interest rate charged must be reasonable (RPC 1.5) and non-usurious.

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