Can a lawyer pay a court-ordered security for costs on behalf of an indigent client in Michigan?

Plain-English summary

The opinion addressed a lawyer whose indigent plaintiff had been ordered to post a $1,500 security for the defendant's costs within 30 days or have the claim dismissed with prejudice. The lawyer asked whether the firm could post the security on the client's behalf.

The Committee read MRPC 1.8(e), which bars a lawyer from providing financial assistance to a client in connection with litigation, with two exceptions: a lawyer may advance court costs and litigation expenses for which the client remains ultimately responsible, and a lawyer representing an indigent client may pay court costs and litigation expenses on the client's behalf. The Committee concluded that money needed to post security for the opposing side's costs, in order to keep a claim from being dismissed, is clearly an "expense of litigation," and that paying it for a genuinely indigent client is specifically permitted under MRPC 1.8(e)(2).

The Committee acknowledged two countervailing concerns and resolved both. On MRPC 1.8(j) (a lawyer's acquiring a proprietary interest in litigation), it reasoned that when the lawyer advances security for costs, the lawyer acquiesces in the amount being used to pay costs and agrees either not to be reimbursed or to look only to any recovery for reimbursement, so no improper interest arises. On MCLA 600.2665, a statute barring a practicing attorney from becoming a surety or posting bond for a client, the Committee noted that whether the conduct violates that statute is a question of law beyond its jurisdiction, but observed the statute likely targets situations where a lawyer's financial liability turns on the client's own conduct, which was not the case here. Because the lawyer agreed to look only to the proceeds for reimbursement, the Committee found no conflict between the lawyer's duties to the client and the lawyer's own interests under MRPC 1.7(b).

Currency note

This opinion was issued in 1991 and interprets the Michigan Rules of Professional Conduct as they then stood. The MRPC have since been amended, and later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could a Michigan lawyer post a security for costs for an indigent client?

A: Yes. The opinion concluded that security for the opposing side's costs is an expense of litigation, and MRPC 1.8(e)(2) lets a lawyer pay litigation expenses on behalf of an indigent client.

Q: Did paying the security give the lawyer a forbidden interest in the case under MRPC 1.8(j)?

A: No. The opinion reasoned that by advancing the security the lawyer agreed either not to be reimbursed or to look only to any recovery, so no improper proprietary interest in the litigation arose.

Q: Did the opinion decide whether the conduct violated the surety statute, MCLA 600.2665?

A: No. The Committee said whether the conduct violated that statute was a question of law beyond its jurisdiction, though it observed the statute likely addressed situations where the lawyer's financial liability turns on the client's own conduct.

Background and rules framework

The opinion interpreted MRPC 1.8(e) / Model Rule 1.8(e) (financial assistance to a client, with the advance-of-costs and indigent-client exceptions), MRPC 1.8(j) / Model Rule 1.8(i) (proprietary interest in litigation), and MRPC 1.7(b) / Model Rule 1.7 (personal-interest conflict), alongside the Michigan court rule on security for costs (MCR 2.109(D)) and the surety statute MCLA 600.2665.

Citations and references

Rules of Professional Conduct:

• MRPC 1.8(e) / Model Rule 1.8(e) (advancing or paying litigation costs and expenses)
• MRPC 1.8(j) / Model Rule 1.8(i) (proprietary interest in litigation)
• MRPC 1.7(b) / Model Rule 1.7 (personal-interest conflict)

Statutes and court rules:

• MCR 2.109(D) (new or additional security for costs)
• MCLA 600.2665 (attorney as surety or bond for a client)

See also

• Mich Ethics Op. RI-333: Advancing Client Fines and Costs
• Mich Ethics Op. RI-336: Bank-Financed Litigation Costs

Source

• Landing page: https://www.michbar.org/opinions/ethics/numbered_opinions?OpinionID=961&Type=6

Original opinion text

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

RI-91

June 25, 1991

SYLLABUS

It is not unethical for a lawyer to pay to the court a security for court costs on behalf of an indigent client.

References: MRPC 1.8(e), 1.8(j); MCR 2.109(D).

TEXT

A lawyer represents an indigent plaintiff in a matter. After considering the plaintiff's affidavit of indigency, the trial judge in the matter granted defendant's Motion for Security for Costs in the amount of $1500, to be paid within 30 days or plaintiff's claim would be dismissed with prejudice. The plaintiff's lawyer asks whether the law firm may pay the security on behalf of the client.

MRPC 1.8(e) states:

"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."

MCR 2.109(D) provides that the court may order new or additional security at any time if the original amount of the bond proves insufficient, and that a person who becomes a new or additional surety is liable for all costs from the commencement of the action, as if he or she had been the original surety. A lawyer's continuing duty to support a client's litigation through payment of court costs would arguably give the lawyer an interest in the subject matter of the litigation, in violation of MRPC 1.8(j).

Money needed to post security for costs of the opposing side in order to proceed with the claim which otherwise would be dismissed is clearly an "expense of litigation." If the client is in fact indigent, the payment of such expenses by the lawyer is specifically permitted under MRPC 1.8(e)(2).

MCLA 600.2665 states:

"No practicing attorney or counselor shall become a surety or post bond for any client in criminal or civil matters. This section shall not apply to any bond of $100.00 or less required to be filed by a fiduciary in the probate court."

Whether the contemplated action violates MCLA 600.2665 is a question of law beyond the jurisdiction of this Committee. It is likely, however, that the statute was intended to address situations where the financial liability of a lawyer is affected by client conduct, e.g., a client's appearance or performance in a matter. When, however, as in this case, the lawyer advances security for costs, the lawyer acquiesces in having the amount used to pay the costs and agrees either not to be reimbursed at all or to look only to the proceeds of the recovery for reimbursement. Under those circumstances, there is no conflict between the lawyer's duties to the client and the lawyer's duties to the lawyer or a third party, MRPC 1.7(b).