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End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.


Florida Legal Ethics

1.8   Rule 1.8 Conflict of Interest: Prohibited Transactions

1.8:100   Comparative Analysis of Florida Rule

Primary Florida References: FL Rule 4-1.8
Background References: ABA Model Rule 1.8, Other Jurisdictions
Commentary:

1.8:101      Model Rule Comparison

The Florida Rule omits MR 1.8(i), regarding accepting representation in matters where the lawyer knows the opposing party is represented by a relative of the lawyer. The substance of this disqualification is found in FL Rule 4-1.7(d). FL Rule 4-1.8(a) specifies that the prohibition on acquiring adverse pecuniary interests to a client does not apply to a lien granted by law to secure the lawyer's fee or expenses.

1.8:102      Model Code Comparison

DR 5-104(A) provides a prohibition similar to that in FL Rule 4-1.8(a) regarding entering business transactions adverse to a client's interests. DR 4-101(B)(2) prohibits use of a confidence or secret of the client to the client's disadvantage, without FL Rule 4-1.8(b)'s qualification that the client may consent to such use. The Model Code contains no prohibition similar to that in FL Rule 4-1.8(c), except that found in EC 5-5. DR 5-104(B) prohibits a lawyer from obtaining "publication" rights rather than "literary or media" rights. DR 5-103(B) is substantially similar to FL Rule 4-1.8(e)(1). DR 5-106 is similar to FL Rule 4-1.8(g). DR 5-103(A) is similar to FL Rule 4-1.8(i).

1.8:200   Lawyer's Personal Interest Affecting Relationship [see also 1.7:500]

Primary Florida References: FL Rule 4-1.8
Background References: ABA Model Rule 1.8(a), Other Jurisdictions
Commentary: ABA/BNA § 51:501 et seq., ALI-LGL § 126, Wolfram §§ 7.6, 8.11

FL Rule 4-1.8 bars a lawyer from: (1) preparing an instrument making the lawyer or a close relative the beneficiary of a gift unless related to the donor; (2) acquiring literary or media rights to any portrayal based on an existing representation; or (3) acquiring a proprietary interest in a cause of action. FL Rule 4-1.8 limits the circumstances under which an attorney may: (1) enter into a business transaction with a client; (2) use confidential information to a client's disadvantage; (3) provide financial assistance to a client; (4) accept compensation from a third party; (5) settle claims involving multiple clients; and (6) limit the attorney's liability for malpractice. The guiding principle of FL Rule 4-1.8 is fairness. Comment FL Rule 4-1.8. The idea is not so much to prevent attorney-client transactions as to ensure fairness to all parties. Thus, many of the rule's provisions are designed to ensure that the client has ample opportunity to seek outside advice before entering into any business transactions with the attorney.

1.8:210      Sexual Relations with Clients

FL Rule 4-8.4(i) prohibits a lawyer from engaging in sexual conduct with a client that exploits the lawyer-client relationship. There are no Florida cases or ethics opinions interpreting this rule.

1.8:220      Business Transactions with Clients

FL Rule 4-1.8 allows a lawyer to enter into a business transaction with a client, but only if: (1) the terms are fully explained in writing to the client; (2) the client has a reasonable opportunity to seek advice from another attorney; and (3) the client consents in writing to the transaction. Courts strictly adhere to these requirements, and a lawyer who does not follow them is subject to discipline. The lawyer's intent regarding the transaction is largely irrelevant.

Even attorneys who have undertaken transactions with clients for good reason have been disciplined. See, e.g., Florida Bar v. Kramer, 593 So. 2d 1040 (Fla. 1992)(attorney who loaned client money in return for property deed to avoid foreclosure on the property held in violation of FL Rule 4-1.8(a), regardless of whether attorney's motive was to keep property for client); Florida Bar v. Reed, 644 So. 2d 1355 (Fla. 1994)(attorney who represented two clients in the same real estate transaction and had one execute a quit claim deed to her in an attempt to salvage the transaction held in violation of FL Rule 4-1.8(a) despite absence of self-serving intent).

The penalties in such cases are mild in comparison to those in which the attorney has an evil or self-serving intent. See, e.g., Florida Bar v. Clement, 662 So. 2d 690 (Fla. 1995)(attorney who misled client into thinking that $20,000 loan was an advance rather than a loan was disbarred); Florida Bar v. Jasperson, 625 So. 2d 459 (Fla. 1993)(attorney who persuaded clients in bankruptcy to sell him their home under the guise that it would protect their estate was suspended for one year).

In Florida Bar v. Nesmith, 642 So. 2d 1357 (Fla. 1994), the court found the attorney did not violate FL Rule 4-1.8(a) when he accepted a loan from the majority shareholder of a corporation because the corporation, not the shareholder, was the client. The court held the shareholder had made the loan in a personal, not a corporate, capacity.

1.8:300   Lawyer's Use of Client Information

Primary Florida References: FL Rule 4-1.8
Background References: ABA Model Rule 1.8(b), 1.9(c), Other Jurisdictions
Commentary: ABA/BNA §§ 55:501-55:2001 , ALI-LGL § 61, Wolfram § 6.7

As in FL Rule 4-1.7 and FL Rule 4-1.9, under FL Rule 4-1.8 it is first necessary that there be an attorney-client relationship before the rule is triggered. In Florida Bar v. Beach, 675 So. 2d 106 (Fla. 1996), the attorney advised a paralegal service, which in turn relayed that advice to its clients. The clients knew that the attorney was giving legal advice, but had signed agreements indicating that the attorney would not be their lawyer unless they entered a separate agreement with him. The attorney represented the paralegal service in a dispute with one of its clients. The court found no violation of FL Rule 4-1.8(b) because the attorney had never "represented" anyone within the meaning of the rule. The attorney was, however, found to have violated FL Rule 4-5.4 (sharing a fee with a nonlawyer) and FL Rule 4-5.5 (assisting in the unauthorized practice of law).

1.8:400   Client Gifts to Lawyer

Primary Florida References: FL Rule 4-1.8(c)
Background References: ABA Model Rule 1.8(c), Other Jurisdictions
Commentary: ABA/BNA § 51:601, ALI-LGL § 127, Wolfram § 8.12

Florida courts have strictly interpreted the absolute prohibition of FL Rule 4-1.8(c) against a lawyer naming the lawyer or a relative as the beneficiary of a gift from a client. In Florida Bar v. Anderson, 638 So. 2d 29 (Fla. 1994), an attorney executed nine testamentary instruments in two years naming himself or his wife beneficiaries of a client’s estate. The court ordered the lawyer suspended for 90 days, even though he did not personally benefit and was only “inartfully” attempting to follow the client’s instructions to shield the bequests from creditors of the intended beneficiary. In Florida Bar v. Poe, 786 So. 2d 1164 (Fla. 2001), a lawyer was disbarred for drafting a will naming himself as a beneficiary even though he had prepared and executed a renunciation. As aggravating factors, the court noted that the lawyer had a lengthy disciplinary history and was a close friend of the testator.

1.8:500   Literary or Media Rights Relating to Representation

Primary Florida References: FL Rule 4-1.8(d)
Background References: ABA Model Rule 1.8(d), Other Jurisdictions
Commentary: ABA/BNA § 51:701, ALI-LGL § 36, Wolfram § 9.3.3

[The discussion of this topic has not yet been written.]

1.8:600   Financing Litigation

Primary Florida References: FL Rule 4-1.8(e)
Background References: ABA Model Rule 1.8(e), Other Jurisdictions
Commentary: ABA/BNA § 51:801, ALI-LGL § 36, Wolfram § 9.2.3

FL Rule 4-1.8(e) prohibits a lawyer from providing financial assistance to a client in connection with pending or contemplated litigation. The rule provides exceptions for a lawyer to: (1) advance court costs to a client; and (2) pay an indigent client's litigation expenses. In Florida Bar v. Taylor, 648 So. 2d 1190 (Fla. 1994), a lawyer faced discipline for giving a client $200 of his firm's money for basic necessities. The court found that the lawyer had not violated the rule, holding that the phrase "in connection with pending or contemplated litigation" was designed only to prevent a lawyer from promising or giving a client money to ensure that the lawyer will represent the client. The court cited with approval the referee's finding that it is not appropriate "to sanction lawyers who provide used clothing for a client's child or persuade the senior partner in the law firm to issue a check for $200.00 for an indigent client's necessities." Compare Florida Bar v. Witt, 626 So. 2d 1358 (Fla. 1993)(attorney suspended when he sent client $1,200-- the approximate amount of the client's claim-- after ignoring client's case, so that lawyer could continue to represent client).

1.8:610      Litigation Expenses

[The discussion of this topic has not yet been written.]

1.8:620      Living and Medical Expenses

[The discussion of this topic has not yet been written.]

1.8:700   Payment of Lawyer's Fee by Third Person

Primary Florida References: FL Rule 4-1.8(f)
Background References: ABA Model Rule 1.8(f), Other Jurisdictions
Commentary: ABA/BNA § 51:901, ALI-LGL § 134, Wolfram § 8.8

[The discussion of this topic has not yet been written.]

1.8:710      Compensation and Direction by Third Person

[The discussion of this topic has not yet been written.]

1.8:720      Insured-Insurer Conflicts [see also 1.7:315]

[The discussion of this topic has not yet been written.]

1.8:730      Lawyer with Fiduciary Obligation to Third Persons [see 1.13:520]

[The discussion of this topic has not yet been written.]

1.8:800   Aggregate Settlements

Primary Florida References: FL Rule 4-1.8(g)
Background References: ABA Model Rule 1.8(g), Other Jurisdictions
Commentary: ABA/BNA § 51:375, ALI-LGL § 129, Wolfram § 8.15

[The discussion of this topic has not yet been written.]

1.8:900   Agreements Involving Lawyer's Malpractice Liability

Primary Florida References: FL Rule 4-1.8(h)
Background References: ABA Model Rule 1.8(h), Other Jurisdictions
Commentary: ABA/BNA § 51:110l, ALI-LGL § 54, Wolfram § 5.6.7

[The discussion of this topic has not yet been written.]

1.8:910      Prospective Limitation of Malpractice Liability

[The discussion of this topic has not yet been written.]

1.8:920      Settlement of Legal Malpractice Claim

It is a violation of Rule 4-1.8(h) for a lawyer to attempt to settle a potential claim against the lawyer without first advising the client to seek independent representation in connection with the claim. Florida Bar v. Jordan, 705 So. 2d 1387 (Fla. 1998).

1.8:1000   Opposing a Lawyer Relative

Primary Florida References: FL Rule 4-1.7(d)
Background References: ABA Model Rule 1.8(i), Other Jurisdictions
Commentary: ABA/BNA § 51:1301, ALI-LGL § 123, Wolfram § 7.6.6

There are no Florida cases or ethics opinions dealing with opposing a lawyer relative.

1.8:1100   Lawyer's Proprietary Interest in Subject Matter of Representation

Primary Florida References: FL Rule 4-1.8(j)
Background References: ABA Model Rule 1.8(j), Other Jurisdictions
Commentary: ALI-LGL §§ 43, 125, Wolfram §§ 8.13, 9.6.3

1.8:1110      Acquiring an Interest in Subject Matter of Representation

In Lee v. Gadasa, 714 So. 2d 610 (Fla. 1st DCA 1998), the court noted that while it may be a violation of FL Rule 4-1.8 to take a junior mortgage in a client’s property, under the circumstances of that case disqualification of the lawyer was not required because of delay in the filing of the motion to disqualify and because the client could consent.

1.8:1120      Contingent Fees [see also 1.5:600]

[The discussion of this topic has not yet been written.]

1.8:1130      Lawyer Liens

[The discussion of this topic has not yet been written.]

1.8:1140      Retention of Files to Collect Fees

[The discussion of this topic has not yet been written.]