Do I have any recourse if my attorney is not allowing to borrow against my personal injury case? 31 Answers as of October 28, 2011

Despite the fact that it may be in your contract with your attorney, an attorney cannot ethically lend money to a client for personal living or medical expenses, to be repaid out of settlement proceeds or judgment. In re Brown, 298 Or 285, 692 P2d 107 (1984); In re Murphy, 9 DB Rptr 93 (1995); OSB Legal Ethics Op No 1991-4. The attorney can advance or guarantee the expenses of litigation as long as you remain ultimately liable for those expenses, but he or she cannot allow you to borrow against the case.

Your recourse is to either live up to your word or fire your attorney and hire one that doesnt understand why your attorney has this clause in his/her contract. You have a smart attorney, stick with them.

It is unethical in Ohio for an attorney to give anything of value to a client, and this includes allowing a client to "borrow" from a negligence case. That is essentially the same thing as the attorney providing the client with loan. If this is written into the contract with the attorney, then there may be a problem. You should consult with another attorney to review your fee agreement and your current situation.

It is not clear from your question whether you are trying to borrow from the attorney or from third parties. Ethics rules prevent attorneys from lending money to clients. If the retainer agreement has a clause about loaning money, it probably refers to the attorney advancing costs of the case, which is common. If a Plaintiff can find a third party to lend money against a personal injury claim, then the Plaintiff is free to do so, and I do not believe the Plaintiff needs permission from the attorney. There are companies such as Oasis and others who loan money against personal injury claims. With these companies, the lender requires the attorney to give a summary of the facts of the case, and will usually lend only if liability is either admitted, or if liability is close to certain based on the facts. In medical malpractice cases, liability is rarely close to certain. Often, I have had clients seek these loans, and I will not fill out the paperwork for the lender, especially early in the case, because I have insufficient information to convince a lender that liability is probable, or I cannot in good faith give the lender my opinion that liability is reasonably certain. Most attorneys discourage these loans because the interest is so high and many clients regret it in the end. I have been advised by these lenders themselves that it is a bad idea for a Plaintiff to seek these loans unless it is to cover absolute necessities.

You raise a very difficult issue. There are now legalized loan sharks who loan money against personal injury cases at extremely high interest rates. Attorneys who treat their clients well hate these legal loan sharks for these reasons: 1) A good, honest attorney judges his or her success on how much the client can net out of the settlement. It's not the total settlement that really determines how well the client was served; it's how much the client gets to keep. So if the client borrows against the settlement from a loan shark the client will end up with a crappy settlement after attorneys fees, medical liens, and loan shark liens. 2) If the cllient borrow a lot against the settlement the client now wants to roll the dice and go to trial in the hopes of a giant win even if a settlement would make sense. A settlement that might have made sense before the loan shark lien now make may no sense to the client. As a result an attorney has a choice with a client like you. The attorney can tell you to get another lawyer if you want to borrow against the case. Or the attorney can help you give up large amounts of your potential recovery in interest payments to legal loan sharks. I had a client walk on me because I wouldn't work with a loan shark so the client could borrow money against her case. I later talked to the attorney who took her casebecause I was asserting a lien for my time on the case. The new attorney told me that he would prefer to refuse to work with the loan sharks but he felt he could only stay in business by working with the loan sharks if that is what the client wanted. Medical malpractice cases are very difficult and most attorneys refuse to take them. You may find that if you try to take your case elsewhere you will not find a new attorney to take on the case. So, if you fire your current attorney to seek to find one that will work with a loan shark, your fired attorney will have a lien on your case for his or her time, and you may have a hard time getting a new lawyer.

It's a bad idea to borrow against a medical malpractice or personal injury case. Many attorneys won't allow clients to do it, because it usually ends up costing a lot more than any benefits. If the attorney-client agreement says no borrowing against the case, then you can't do it without losing your attorney (which would mean you would lose your case, more than likely).

Borrow from whom? Your attorney? Many states consider it unethical for an attorney to loan money to their clients.

The Rules of Professional Conflict (RPC) 1.8 set forth specific rules regarding conflicts of interest with current clients. http://www.courts.wa.gov/court_rules/?fa=court_rules.display&group=ga&set=RPC&ruleid=garpc1.08 There are also independent outfits such as Oasis Legal Finance who will sometimes lend money if you have a potential case.

I never allow my clients to "borrow against" their cases. (1) Advancing funds to the client by the attorney violates the professional conduct rules in the two jurisdictions including NH in which I practice. (2) A civil claim or action is not a bank account. There are companies that will lend money against the case but in my view this cheapens the process and creates a new unwarranted view that a case is a money tree. I also do not want these sharks breathing down my back. The professional conduct rules, again, require that the attorney maintain independent professional judgment free and clear of such outside intrusion. No medical malpractice case is a "sure thing" or an "open and shut case". No trial is a certain thing. I have only ever lost two clients in over 20 years of practicing law due to my above stated views. I did not consider it a loss.

Your lawyer is protecting you from a terrible financial decision. I wish loans against personal injury claim were illegal.