The Florida Bar
An attorney may not ethically agree to pay fees and costs assessed to a client pursuant to the Offer of Judgment statute.
(February 15, 1997)
(February 15, 1997)
RPC: Rule 4-8.4(d), Rule 4-1.8(e)
Cases: The Florida Bar re: Amendment to Rules , 550 So. 2d 442 (Fla. 1989), Goode v. Udhwani , 648 So. 2d 247 (Fla. 4th DCA 1995),
Opinions: New York State Bar Ethics Opinion 1989-3
Misc: Florida Statute 768.79, Florida Rule of Civil Procedure 1.442
A member of the Florida Bar requests an advisory ethics opinion regarding the lawyer's ability to agree to pay costs and fees assessed against the lawyer's client in accordance with section 768.79, Florida Statutes. Specifically, the inquiring attorney has asked the following question:
Whether or not I, as attorney for plaintiff, may enter into an agreement with my client that if we go to trial and if we are unsuccessful and become subject to sanctions of attorney's fees and costs pursuant to the first defendant's Offer of Judgment, may I, as the attorney, agree to pay my clients' attorney's fees and costs to the defendant's insurer if we lose?
Pursuant to section 768.79 of the Florida Statutes (hereinafter, the "statute"), a plaintiff who refuses an offer of settlement made by the defendant must pay reasonable costs, including attorney's fees, incurred by the defendant from the date of the offer if the judgment is one of no liability or the judgment obtained by the plaintiff is at least 25 percent less than the offer. Under the statute, the assessment of costs and fees against a client will occur, if at all, only at the conclusion of the litigation. The statute provides that a court must either set off such costs and fees against any award obtained by the client, or, if the client obtains an award less than the amount of the costs and fees, the court will enter a judgment against the plaintiff for the amount of costs and fees not covered by the plaintiff's award.
Referring to Florida Rule of Civil Procedure 1.442, which requires parties to comply with the procedures set forth in section 768.79, the Supreme Court of Florida has described the procedure governing offers of judgment as one "by which parties are sanctioned for failure to accept bona fide offers of settlement prior to trial." The Florida Bar re: Amendment to Rules , 550 So. 2d 442 (Fla. 1989). Additionally, in Goode v. Udhwani , 648 So. 2d 247 (Fla. 4th DCA 1995), the court stated that, "The purpose of section 768.79 was to serve as a penalty if parties did not act reasonably and in good faith in settling lawsuits."
The committee concludes that the proposed conduct would be prejudicial to the administration of justice, in violation of Rule 4-8.4(d), because it would defeat the purpose of the Offer of Judgment statute. In Opinion 1989-3, the New York State Bar Association Committee on Professional Ethics found that an agreement requiring a client to pay Rule 11 sanctions imposed upon a lawyer for filing non-meritorious claims was unethical because it defeated the purpose of the Rule and improperly shifted liability to the client. Similarly, the deterrent effect of the Offer of Judgment statute would be defeated if lawyers could insulate their clients from potential financial liability.
Furthermore, costs and fees assessed pursuant to this statute are not the type of "financial assistance" contemplated by Rule 4-1.8(e).
Based upon the foregoing, the committee concludes that the proposed conduct is ethically impermissible.