NYSBA Ethics Opinion 37a

NYSBA Ethics Opinion 37a

3.1.1968

By Committee on Professional Ethics

NEW YORK STATE BAR ASSOCIATION

Professional Ethics Committee Opinion

Opinion #37(a) – 03/01/1968 (31-67)
Modified by #37

Topic: Champerty, Assumption of Responsibility for Litigation Expenses
Digest: Lawyer’s assumption of personal responsibility for client’s expenses for experts in the preparation of litigation is not improper provided client is to reimburse lawyer
Canon: Former Canons 10, 28, 42

QUESTION

This Committee issued Opinion No. 37 – 11/30/66, which states that it would be ethically improper for a lawyer to respond to a demand by his client’s physician that the lawyer assume personal responsibility for the payment of the physician’s fees for examinations, reports, conferences and testimony in connection with personal injury litigation.  Our Committee is now asked whether Opinion No. 37 was intended to forbid a lawyer from assuming personal responsibility for the payment of experts, including medical experts, employed by the lawyer to assist him in the preparation of a lawsuit.

OPINION

It is the opinion of this Committee that there is no ethical impropriety in a lawyer assuming personal responsibility for the payment of experts, including medical experts, employed by him to assist in the preparation of a lawsuit, provided that he does so subject to reimbursement by his client.  Such an assumption of personal responsibility by a lawyer is not forbidden by Canon 42, if made in good faith and as a matter of convenience:Canon 42 provides:”A lawyer may not properly agree with a client that the lawyer shall pay or bear the expenses of litigation; he may in good faith advance expenses as a matter of convenience, but subject to reimbursement.”The basic purpose of Canon 42, like Canons 10 and 28, is to implement the policies against champerty, maintenance and barratry.  What are condemned by Canon 42 are arrangements between a lawyer and his client that the former shall bear the expenses of litigation. A lawyer may appropriately employ experts, including medical experts, and assume personal responsibility for payment of such experts, subject to reimbursement by his client, without violating the policies of Canons 10 and 42.  He cannot, however, become a joint venturer in a lawsuit.  See Opinion No. 474 (January 4, 1939) of the Committee on Professional Ethics of The Association of the Bar of the City of New York.  Also cf. ABA Informal Opinions No’s. 398, 664 and 911.A lawyer’s assumption of personal responsibility for fees for medical treatment, even when subject to ultimate reimbursement by his client, would be unjustified and professionally improper.  Just as a lawyer may not advance living costs to an injured client while suit is pending, ABA Formal Opinion 288 (October 11, 1954), he may similarly neither advance nor assume responsibility for obligations of his client for medical treatment or other personal obligations.A distinction must be made between a physician’s services in diagnosing or treating the plaintiff’s injuries and a physician’s assistance in connection with prosecution of a pending claim or lawsuit.  The physician is, of course, entitled to be compensated for all his services, but the lawyer can assume responsibility only for those related to the litigation.Whether or not in any particular case a lawyer may properly advance the payment for these charges as “necessary reimbursable expenses” depends on whether he can do so in good faith, as required by Canon 42, and without violating accepted policies against champerty and maintenance.  It is, however, implicit in the “Standards of Practice for Doctors and Lawyers,” approved jointly by our Association and the Medical Society of the State of New York, 33 N.Y.S.B.J. 364 (1961), that it would be professionally inappropriate for a patient’s attending physician to condition consultations, reports or attendance at trial on receiving advance payment or commitment from his patient’s lawyer for services not directly applicable to the prosecution of the claim or suit.In other words, the services of a physician, whether the attending physician or one separately retained for the purpose, in helping the lawyer prepare for and conduct a lawsuit, fall in the same category as the services of an investigator, expert engineer, or any other individual who renders some special service needed as an incident of trial preparation.  There are all contractual obligations which may be appropriately assumed by the lawyer, though subject to ultimate reimbursement by his client.To the extent inconsistent herewith, Opinion No. 37 is overruled.