As you may remember this is the rule that in most jurisdictions bans attorneys from providing financial assistance to clients involved in litigation. It is a rule that has been around forever, but as old as it is, it has also been criticized for not allowing much flexibility. Some jurisdictions have adopted exceptions for deserving circumstances and in other jurisdictions courts have interpreted the rule to allow humanitarian help, even if the rule does not say that.
So, partly - probably mostly - in response to the health crisis brought about by the Covid-19 pandemic, the New York City Bar Association has made a formal proposal for an amendment to the rule. You can read the full text of the proposal here.
As the proposal states, the proposed amendment would create a “humanitarian exception” to the current rule, which prohibits lawyers from providing financial assistance to litigation clients.
This proposal was originally approved back in January 31, 2020 by the NY State Bar Association which then sent its recommendation to the Administrative Board of the Courts for consideration. The NYCBA is merely now urging the Courts to act quickly to approve the humanitarian exception.
It should be noted that the request makes clear that the need for the humanitarian exception is not limited to the current pandemic.
. . . .Even before the current crisis, lawyers representing indigent clients pro bono have sought to provide financial assistance to clients in order to help them with basic necessities such as food, clothing, and access to healthcare.
Under the current version of the ethics rules, a lawyer or law office could face disciplinary action for engaging in many of the activities described above. But that should not be the case. The humanitarian exception before the Courts is consistent with lawyers’ ethical and moral obligations to “seek improvement of the law; and to promote access to the legal system and the administration of justice.” Especially now, lawyers should not be limited in their ability to provide assistance to clients who are struggling to make ends meet.The proposal ends by suggesting that, as an alternative, if the Courts require more time to study the humanitarian exception and decide whether to fully amend Rule 1.8(e), the Courts should consider taking immediate short-term action, such as issuing a temporary order adopting the humanitarian exception until such a time as New York is no longer in a state of emergency that would expressly allow lawyers to provide financial assistance to indigent clients they are representing pro bono if the client has been financially impacted by the COVID-19 pandemic.
I understand the public policy behind rules that ban lawyers from providing financial assistance to clients but I agree that a humanitarian exception is a good idea. In fact, I have argued that the rule should be amended rather than interpreted judicially to say something it does not say. The proposal in NY takes the correct approach and it should be approved.
For comments on the issue go to The Law for Lawyers Today, Ethical Grounds, and Louisiana Legal Ethics.
Meanwhile, the ABA's Standing Committees on Ethics and Professional Responsibility and on Legal Aid and Indigent Defense have drafted a proposal to have the ABA House of Delegates approve a similar provision for the Model Rules. The new exception would allow lawyers providing pro-bono services to provide financial assistance to clients under certain circumstances. You can read the proposal here.
Note that neither proposal would allow a lawyer to provide financial assistance to a client if the legal services are being provided for a fee. This means that a lawyer representing a client in financial need on a contingency fee would not be allowed to provide financial assistance. If the client charged a contingency fee is in as much need as the one who is not charged a fee, why not allow the exception to apply?