January 26, 1989
The ethical prohibition against attorneys advancing living or medical expenses to a client applies to lawyers employed by legal service organizations.
References: MRPC 1.8(e)(1) and (2).
A lawyer employed by a legal services agency and specializing in domestic relations matters asks whether it is permissible to personally give clients, during pending litigation, monetary or in-kind gifts for living and medical expenses, such as (a) $150 to an indigent to enable a client to comply with the court's custody order; (b) the cost of transportation for a client in an abuse and neglect matter to attend occasional therapy sessions when the social caseworker is unavailable; (c) donation of furniture to an indigent and/or solicitation of household items needed to establish a satisfactory home environment to qualify for child visitation rights.
The lawyer proposes to donate the necessary funds from personal resources and/or to solicit contributions from professional colleagues and other persons.
MRPC 1.8(e)(1) and (2) state:
"(e) A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:
"(1) A lawyer may advance court costs and expenses of litigation, the repayment of which shall ultimately be the responsibility of the client; and
"(2) A lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client."
MRPC 1.8(e)(1) permits a lawyer to advance court costs and litigation expenses, provided the client remains ultimately liable for repayment of all advances, regardless of the outcome of the litigation. MRPC 1.8(e)(2) is more liberal in the case of an indigent client, since a lawyer is permitted to pay court costs and litigation expenses on behalf of an indigent client without any requirement of client reimbursement, but MRPC 1.8(e) applies only to costs associated with litigation.
MRPC 1.8(e) is the result of the common law rules against champerty and maintenance. Champerty is an investment in the cause of action of another by purchasing a percentage of any recovery. Maintenance is another form of investment by providing living or other expenses to finance litigation. When a lawyer has a financial stake in the outcome of a client's lawsuit, there is a legitimate concern that the lawyer's undivided loyalty to the client may be compromised in an effort to protect the lawyer's personal financial investment in the outcome. Also financial support to a client could interfere with settlement efforts, by enabling the client to prolong the dispute. MRPC 1.8(e) makes no distinction between private practitioners and legal aid staff attorneys. The Rule does not allow attorneys practicing in Michigan to personally donate and/or solicit monetary or in-kind gifts for clients to meet living expenses during pending litigation, even when necessary to comply with court orders.
If an indigent person is unable to secure financial assistance needed to comply with court orders, qualify for child visitation rights, obtain necessary medical treatment incident to an abuse proceeding or other similar necessities of life during pending litigation, the client may be referred to the appropriate social services agencies, and there is no ethical rule prohibiting the lawyer or the legal services agency from assisting those agencies in securing resources necessary to make social services available to needy members of the community.
In conclusion, it is unethical for an attorney employed by a state-funded legal services agency to personally donate and/or solicit monetary or in-kind gifts to clients for living and medical expenses during pending litigation.