The Florida ethics rules are clear that a lawyer cannot “loan” his or her client monies against the settlement. In other words, a loan to the client FROM the lawyer is not allowed. Florida Ethics opinion 65-39 makes this clear.
As a result, there are companies that offer non-recourse advancements to the clients against their cases. Florida Ethics Rule 00-3 discusses this situation. These companies give the clients money in exchange for the client paying them back (plus extra monies or interest) when the case resolves. The main issue is that there are a lot of charges and the client can oftentimes have to pay back two or three times the amount of money they were advanced. For this reason, the Florida bar expressly discourages the use of these non-recourse advancements. The “non-recourse” wording of these advancements means that the client only owes the money back IF they get a settlement or verdict. In theory, if the client would lose in court or not get a settlement, then they would not owe the money back to the advancement company.
I read the ethics opinions on these non-recourse loans as directing the lawyer to try to discourage my clients from getting the advancements. But many clients still do the advancements and if after I do my best to discourage them they still want the loan, then I do what is necessary to assist them. I do encourage them to call a couple companies and to ask what would be owed back after 3 months, 6 months and 1 year and compare prices.
If the purpose for the client in getting the loan is to buy a purse, that would obviously be a very bad reason to get an advancement. However, if the client is about to be evicted or has a reason like that to get the advancements, particularly if they have been out of work due to the accident, then an advancement may be in their interest.
There are thus many considerations in the non-recourse settlement advancement to be considered and to discuss with your Florida personal injury lawyer.
