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RICHMOND COUNTY BAR ASSOCIATION
COMMITTEE ON PROFESSIONAL ETHICS
OPINION # 8
February 13, 1992
Wayne M. Ozzi, Esq.
Supreme Court of the State of New York
Richmond County Courthouse
18 Richmond Terrace, St. George
Staten Island, New York 10301
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Re: Inquiry by Andrew McGee, Esq.
to Ethics Committee of the
Richmond County Bar Association
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Dear Wayne:
In response to the recent inquiry by Andrew McGee, Esq., regarding
his case of Mackey v. Richards, it is my considered opinion
that his proposed short—term personal loan to his clients is
not violative of DR5—103.
Initially, it should be emphasized that DR5—103 is directed toward “avoiding acquisition of interest in litigation”. The inquiring attorney merely proposes to extend a short—term personal loan to his clients. He does not indicate that he will take a lien upon the proceeds of the settlement, and it is assumed that the loan will be evidenced by an unsecured note. Therefore, it does not appear that the attorney would be acquiring a proprietary interest in the litigation, and it is further assumed that his contingency fee arrangement is a wholly separate consideration,
Furthermore, inquiring counsel indicates that the underlying cause of action has been settled in substance, and that the releases and stipulation of discontinuance have already been executed by the clients. Therefore, it would appear that the litigation is no longer “contemplated or pending”, but rather has or is being settled and resolved for all practical purposes. The settlement check would appear to be literally “in the mail”. Thus,
it is my opinion that inquiring counsel s ability to represent his clients interest is not compromised by the extension of the short— term personal loan.
While this practice is generally not encouraged (see ABA Canon
42), this particular situation is not expressly forbidden. The
intent of this disciplinary rule should be viewed in this instance
in the light of Drinker, Legal Ethics (1953) 99, where
Resolution XXVI of Hoffman s Fifty Resolutions in Regard to
Professional Deportment is referred to, and which reads, in
part, as follows:
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“I will never be tempted by any pecuniary advantage however
great, nor be persuaded by any appeal to my feelings however
strong, to purchase, in whole or in part my client s cause.
Should his wants be pressing, it will be an act of humanity
to relieve them myself, if I am able, and if I am not, then
to induce others to do so”. (Drinker, at p. 343)/td>
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Therefore, in view of the dire needs of the clients and their
immediate prospect of losing their home, it would certainly
be a permissible “act of humanity” for inquiring counsel
to extend the short—term loan.
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Timothy Forsyth, Esq.
Committee Member |
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