In 2002, the Florida Bar relaxed its opinion on pre-settlement funding in its Ethics Opinion 00-3. Before this opinion, attorneys in Florida could only advance money to clients for litigation purposes, meaning only expenses for the case, not personal. As you may well know, everyday living expenses can add up fast, especially if you are not working because of an accident. Attorneys could only suggest to a client where the client could try to obtain financial help for individual needs, but attorneys could not become part of the loan process (Opinion 75-24).
The Florida Bar felt that if a lawyer initiates the loan by recommending his or her client to a loan company, it would be unclear if the lawyer was acting on behalf of the client or the lending company. The Bar was also concerned for the client’s recovery amount after the loan and interest was paid back, along with attorneys’ fees and litigation expenses (Opinion 75-24).
This left a lot of work for the clients and most companies would not lend to the clients because they did not have an attorney’s opinion to corroborate the client’s needs and if the client would be able to pay back the loan.
To help those who were truly in need of assistance the Florida Bar loosened its former opinions. Although, it should be noted that the Florida Bar still discourages the use of non-recourse advance funding companies. Opinion 00-3 states:
“This Committee can conceive of only limited circumstances under which it would be in the client’s best interests for an attorney to provide clients with information about funding companies that offer non-recourse advance funding or other financial assistance to clients in exchange for an assignment of interest in the case. Under theses limited circumstances an attorney may advise a client that such companies exist only if the attorney also discusses with the client whether the costs of the transaction outweigh the benefits of receiving the funds immediately and the other potential problems that can arise. Only after this discussion may a lawyer provide the names of advance funding companies to clients.”
An attorney may provide information, such as medical records and accident reports, to the funding company about the case only if the client agrees. Before the attorney can provide the information he or she must thoroughly go over the effects of disclosure with the client.
An attorney may honor the client’s valid, written assignment of a portion of the recovery to the funding company, but he or she may not issue a letter of protection to the funding company.
To sum up, once you and your attorney discuss and determine that pre-settlement funding is right for you, your attorney may give you the names of lending companies. Your attorney may then provide information about the case to the funding company with your consent and may honor your valid written assignment of a portion of your lawsuit to the funding company.
Should you and your attorney determine that pre-settlement funding is right for you, please contact Great Bay Capital at 1-866-454-7328. We want to help Floridians get the what they need today so they can wait for the settlement they deserve tomorrow!