Can a lawyer charge a contingency-fee client interest on litigation costs the lawyer advances?
Apply this to your situation
This page answers the general question as of 2001. Ask about yours and see what the current Washington Rules of Professional Conduct says for your facts, with citations.
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 Treat this page as historical context, not current guidance.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
- WSBA Ethics Op. 1911: Repayment of Advanced Costs Contingent on Outcome
- WSBA Ethics Op. 1928: Advancing Litigation Costs to an Indigent Pro Bono Client
- WSBA Ethics Op. 1552: Advancing Costs of Treatment or Examination
Source
- Landing page: https://ao.wsba.org/print.aspx?ID=1202
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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