If a lawyer helped one client get a loan from another client, can the lawyer later foreclose the loan for one of them?

Plain-English summary

A member explained that, at the request of Client A, he had procured a loan from Client B, which Client A agreed to repay within one year and secured by a mortgage on real estate. The debt was not repaid, and Client B was now asking the lawyer to foreclose the mortgage. The member asked the committee about the ethics of doing so.

The committee's opinion was that, if both clients consented, the lawyer could probably foreclose the mortgage without violating the Canons of Ethics, but that under the circumstances he should decline to represent either client in the matter and leave them to procure other counsel.

Currency note

This opinion was issued in 1963, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. The opinion applied former Canon 6 of the Canons of Professional Ethics; representing one client in a matter directly adverse to another client is now addressed by Rule 4-1.7 (conflict of interest, current clients) of the Rules Regulating The Florida Bar (Model Rule 1.7). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific requirement mentioned here.

Common questions

Q: Can a lawyer foreclose for the lender when both the borrower and lender are his clients?

A: The committee advised the lawyer should decline to represent either client in the foreclosure and leave them to procure other counsel, even though it thought that with both clients' consent he probably could do so without violating the Canons.

Q: Did the clients' consent make the conflict acceptable?

A: The committee said consent would probably allow the lawyer to proceed without a Canons violation, but it still concluded that under the circumstances he should step aside rather than represent either side.

Background and rules framework

The opinion applied former Canon 6 of the Canons of Professional Ethics, which addressed adverse influences and conflicting interests. Representing one client whose interests are directly adverse to those of another client is now governed by Rule 4-1.7 of the Rules Regulating The Florida Bar (Model Rule 1.7).

Citations and references

Rules of Professional Conduct:

• Canon 6 [Canons of Professional Ethics; see current Rule 4-1.7]

See also

• FL Bar Ethics Op. 72-7: Switching Sides After Joint Advice
• FL Bar Ethics Op. 62-63: Both Sides of a Comp Washout

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-62-59/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-62-59-1.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

FLORIDA BAR ETHICS OPINION
OPINION 62-59
March 22, 1963
Advisory ethics opinions are not binding.
A lawyer who assisted a client in procuring a loan from a second client should not later represent either client in the foreclosure on the loan, even if both clients consent.
Canon: 6
Chairman Holcomb stated the opinion of the committee:
The Committee on Professional Ethics has considered an inquiry from a member of The Florida Bar, in which he states that counsel, at the request of Client A, procured a loan from Client B which Client A agreed to pay within one year, securing the same by a mortgage on real estate. The debt has not been repaid, and Client B is now requesting that the lawyer foreclose the mortgage, and the request is for our opinion as to the ethics of the matter.
It is our opinion that, if both clients consent, the lawyer could probably foreclose the mortgage without violating the Canons of Ethics, but we feel that under the circumstances he should decline to represent either client in the matter and leave them to procure other counsel.