1973, October, Pg. 25. ETHICS.

• Author: by Peter C. Bradstreet

2 Colo.Law. 1

The Colorado Lawyer

1973.

1973, October, Pg. 25.

ETHICS

25Vol. 2, No. 12, Pg. iETHICSRepresenting the Indigent Client: The Restrictions of Disciplinary Rule 5---103(B)

by Peter C. BradstreetRepresenting the Indigent Client: The Restrictions of Disciplinary Rule 5---103(B)

by Peter C. BradstreetPeter C. Bradstreet, Bath, New York, is a graduate of the University of Colorado School of Law. His paper, abridged slightly to facilitate publication, was the prize winning essay in the Colorado Bar Association's Ethics Committee essay competition for 1972-1973, in which students at Colorado law schools were asked to submit their essays on a topic specified by the Committee. The views expressed do not necessarily represent the opinions of the Committee, the Association, or the Colorado Lawyer.

The attorney has just finished a conference with a man who has real problems. According to the man's story, he was stopped at a red light when he was hit from behind by a bottling company's delivery truck. Because of the accident, the man is now unable to work: he sustained extensive neck and upper back injuries, a broken arm, and severe facial lacerations. In addition, his savings are all but exhausted from meeting his medical expenses as well as his rent, TV and car payments, and general living expenses for himself, his wife and his three minor children. The attorney, calculating the genuine value of his client's claim at $60,000, calls the bottling company's lawyer and asks for a settlement of $80,000. The company's lawyer replies that (1) he doesn't think from the facts that the company's driver was negligent; (2) even if he were, plaintiff has vastly exaggerated his injuries; and (3) he would be willing to settle for $6,000.

In other words, the client-plaintiff has a claim for negligence reasonably worth $60,000, but can realize only $6,000 from it without pursuing legal remedies which could take many months. Since the plaintiff needs money immediately to meet his normal living expenses, he has been placed in a severe economic squeeze: he has no outside source of income on which he can depend while he presses his legal claim, so is susceptible to pressure from the defendant to accept less than a just settlement. The type of situation involved here is unique in that it involves a practically destitute plaintiff with a claim necessary for his day-to-day living expenses, and a defendant wealthy enough to use the lengthy legal machinery to his greatest advantage.

The likelihood is that this situation is common today. The real parties in interest in many negligence actions are large insurance companies representing individual vehicle operators.

In the instant case, the attorney sincerely feels that the client will be properly compensated only if he is advanced legal and

26living expenses while his claim is adequately pursued through the legal process, free from undue pressure from the defendant for a quick but unfair settlement. From his thorough examination of the evidence, the attorney is convinced of both the defendant's liability and the just and reasonably fair value of the plaintiff's legal claim. But although the attorney is himself willing to advance these funds to the client, he realizes that the American Bar Association has determined that this would be unethical conduct: While representing a client in connection with contemplated or pending litigation, a lawyer shall not advance or guarantee financial assistance to his client.... Disciplinary Rule 5-103(B), ABA Code of Professional Responsibility.

Thus, the attorney is in a quandary; he realizes that the judicial system is intended to assist those in his client's position, but that it does not do so because of the length of time and expense involved. Furthermore, the system will not allow him to assist his client financially so that the client can make use of a process designed for his benefit.

The attorney has two courses of action. He may show that he is fully justified in advancing funds to the client regardless of Disciplinary Rule 5-103(B), and he may, through his local ethics committee, move to establish new ethical guidelines or an alternative system for people in positions similar to that of his client, so that they might be able to advance their legal claims without succumbing to pressure from wealthy defendants.

The attorney's first argument is that the restrictions of Rule 5-103(B) are not justifiable today in that they have developed from a situation which no longer exists, and that they were meant to prevent the maintenance of suits which are different from the instant case. The development of the disciplinary rule involved plus a look at the history of the doctrine of champerty and maintenance support this position.

Disciplinary Rule 5-103(B) is a restatement of the restrictions imposed by the ABA Ethics Committee Opinion No. 288: \

An attorney may not advance living costs to an injured client or the members of his family while suit is pending.... Opinions of the Committee on Professional Ethics (1967) at 641.

An attorney substantially in the same position as the defendant's attorney in the instant case solicited the opinion from the Ethics Committee, noting that the "justification for [advancing living expenses] is based on the fact that a badly injured client may be unable to work for many months following an accident and that the payments are merely an advance on account of the verdict." The soliciting attorney suggested that advancing expenses is objectionable because "[a]t least in some cases, the practice enables plaintiffs who might otherwise return to work to refuse to do so, to claim a continuing disability at the time of the trial and, hence, to secure a larger verdict." In other words, advancing living expenses to a client may allow the client to exaggerate his disability---and thus to get a larger recovery---and it also enables the attorney to collect more through his contingent fee.

In its opinion, the Ethics Committee raised other objections to this practice. First, it gives the attorney an interest in the litigation (contrary to Canon 10 and Disciplinary Rule 5-103(A)) because the attorney's advancements could only be reimbursed if there were a recovery. Second, allowing an attorney to maintain the client during the suit would lead to an inescapable conflict of interest in that the attorney would be partially pursuing his own "part" of the suit, and, therefore, not representing the client with undivided fidelity. Third, this practice, "if publicized, constitutes a holding...