FLORIDA BAR ETHICS OPINION
January 10, 1962
Advisory ethics opinions are not binding.
As to the ethical propriety of the Bar or a lawyer's association providing a revolving fund to be
used for loans to needy plaintiffs, to enable them to bear the cost of litigation until recovery can
be had, the following issues are raised:
1. The increased ability of plaintiffs to finance themselves would tend to create
litigation, which could be construed as champerty.
2. If a lawyer must follow Canon 42 relating to expenses, logic indicates a bar
association should not violate the same canon.
3. There never would be a case in which the plaintiff was certain to obtain
4. Any attorney forced to contribute to such a fund would therefore have an
interest in the litigation and be subject to conflicting interests.
6, 10, 28, 42
Chairman Holcomb stated the opinion of the committee:
A member of The Florida Bar has in mind the possibility of The Florida Bar,
the Academy of Florida Trial Lawyers or some other similar group providing a
revolving fund to be used in loans to needy plaintiffs having meritorious personal
injury claims to enable them to meet their many medical and living costs while
awaiting collection on their claims. He points out that many persons with small
cash reserves are unable to finance themselves; that their counsel cannot advance
funds because of a champerty problem; that they cannot borrow on their claim
even though it is apparently clear cut and there is adequate insurance coverage;
thus placing the claimant at the mercy of borrowing from a small loan company at
exorbitant rates of interest.
He also suggests that it might be possible for the lawyer to seek third parties
to lend the client money upon being satisfied the claim was one on which
recovery was certain and that he would be repaid out of any judgment or
settlement. He points out the social problem involved and asks if there is an
ethical problem involved and asks for suggestions.
One Committee member thinks that the increased ability of persons having claims for
personal injuries to finance themselves would tend to create litigation which would otherwise be
settled because of the economic pressure. A literal application of the principle that anything
tending to promote litigation tends toward champerty would suggest the impropriety of such a
proposal. But against this is the fact that defendants, and particularly insurers of defendants,
capitalize upon the economic need of the claimant to obtain settlements at less than the real value
of the claim. One of the major factors leading to the adoption of workmen's compensation laws
has been the deliberate delay of employers in making settlement to force injured employees to
accept unreasonably low settlements. Such a plan could not be adopted without adequate
regulation and safeguard by The Florida Bar. More good than bad would result from such a plan.
Another member thinks we should in no way approve any of the projects mentioned. We
should not do by indirection what we cannot do directly. There is a substantial possibility that
any such plan might be misunderstood and lead to improper practices. Another member thinks
such a plan would not be ethical.
Another member suggests that there never would be a case in which the plaintiff was
certain to obtain a recovery. If such a fund were to be set up by the Bar, any attorney forced to
contribute thereto would have an interest in the litigation and be subject to conflicting interests,
violating Canon 6, also Canon 10, and also possibly Canon 28 against stirring up litigation. If a
lawyer must follow Canon 42 relating to expenses, a bar association should not violate the same
canon. Likewise, the question arises as to loans to needy defendants, possibly uninsured, and
burdened with the defense of an unjust claim. Certainly a claimant has the right to borrow from
whomever he wants and from whomever will loan to him.