Can a law firm advance litigation costs that the client, including an indigent class, will never have to repay?

Plain-English summary

The committee considered whether a private law firm could advance the costs and expenses of litigation where the client would not be ultimately liable for them. It concluded that doing so is improper under DR 5-103(B). The committee added that the conclusion holds even in a class action, where there is no readily identifiable "client," and even though the class members are indigent.

Currency note

The Virginia State Bar withdrew this opinion on November 18, 2021 (the opinion's heading records "Committee Op Withdrawn November 18, 2021"); it is no longer current guidance and is retained here only as research. The opinion was also issued in 1982, under Virginia's former Code of Professional Responsibility, before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. The committee note records that current Rule 1.8(e)(2) allows a lawyer to pay litigation costs and expenses on behalf of an indigent client, a change from the rule this opinion applied. Subsequent rule amendments or 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 Treat this page as historical context, not current guidance.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 firm pay litigation costs a client would never repay under this opinion?

A: Under this 1982 opinion (withdrawn in 2021), no; the committee found it improper to advance costs where the client would not be ultimately liable for them.

Q: Did indigence or a class action change the result?

A: No. The committee concluded the rule applied even in a class action with no readily identifiable client and even where the class members were indigent.

Q: What does current law allow?

A: The committee note states that current Rule 1.8(e)(2) allows a lawyer to pay litigation costs and expenses on behalf of an indigent client.

Background and rules framework

The opinion applies the former Code's DR 5-103(B), which required the client to remain ultimately liable for advanced litigation expenses. The committee note records that the rule has since changed, mapping the question onto current Virginia Rule 1.8(e)(2), corresponding to ABA Model Rule 1.8(e) on financial assistance to a client.

Citations and references

Rules of Professional Conduct:

• DR 5-103(B) (advancing litigation expenses; client ultimately liable) (former Code)
• Virginia Rule 1.8(e)(2) (paying costs for an indigent client) (cited in the committee note)
• ABA Model Rule 1.8(e) (financial assistance to a client)

See also

• VA LEO 582: Guaranteeing a Physician's Litigation Charges
• VA LEO 820: Paying for a Former Client's Medical Records

Source

• Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
• Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/0485.pdf

Original opinion text

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

LEGAL ETHICS OPINION 485

AVOIDING ACQUISITION OF INTEREST IN LITIGATION/ ADVANCING EXPENSES.

It is improper for a private law firm to advance the costs and expenses of litigation where the client will not be ultimately liable for these costs and expenses. This is so even in a class action --when there is no readily identifiable "client" --and even though the class members are indigent. [See DR:5-103(B).]

Committee Opinion
November 8, 1982

Legal Ethics Committee Notes. – Rule 1.8(e)(2) allows a lawyer to pay litigation costs and expenses on behalf of an indigent client.