BOG3_Results

This amendment is a modification to the 2022 House of Delegates Resolution #2 to Amend RPC 1.8. In 2022, the Oregon State Bar Board of Governors recommended the submission of ABA Model Rule 1.8(e)(3) to the House of Delegates (HOD) for approval. The HOD raised several questions about the proposal and submitted it back to the Legal Ethics Committee (LEC). The LEC submitted this modified language, which the Board of Governors approves and recommends for passage.

Currently, Oregon RPC 1.8(e)(1) and (2) strictly limit financial assistance to clients in connection with a pending or contemplated litigation with two exceptions. First, the lawyer may advance court costs and litigation expenses, the repayment of which may be contingent on the outcome of the matter. Second, for indigent clients, the lawyer may pay the court costs and expenses of litigation. Under the current RPC 1.8(e), attorneys may not give money or things of value to clients in litigation who need help with the basic necessities> of life.

The American Bar Association (ABA) adopted a third subsection to ABA Model Rule 1.8(e) that provides an additional exception to lawyer financial assistance. ABA Model Rule 1.8(e)(3) reads:

(e)  A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:

*     *     *

(3)  a lawyer representing an indigent client pro bono, a lawyer representing an indigent client pro bono through a nonprofit legal services or public interest organization and a lawyer representing an indigent client pro bono through a law school clinical or pro bono program may provide modest gifts to the client for food, rent, transportation, medicine, and other basic living expenses. The lawyer:

(i)  may not promise, assure, or imply the availability of such gifts prior to retention or as an inducement to continue the client-lawyer relationship after retention;

(ii)  may not seek or accept reimbursement from the client, a relative of the client or anyone affiliated with the client; and

(iii) may not publicize or advertise a willingness to provide such gifts to prospective clients.

Financial assistance under this Rule may be provided even if the representation is eligible for fees under a fee-shifting statute.

The ABA noted that this new rule was a narrow exception to ABA Model Rule 1.8(e) that provided increased access to justice to many vulnerable clients. The ABA further noted it was a humanitarian rule, allowing attorneys to help indigent clients with basic needs without running afoul of their ethical obligations. In many instances, the provision of modest gifts can allow an indigent client to continue with their proceedings by providing food security or shelter security, or even simply having access to the courthouse by providing fare for transportation.

At the 2022 HOD meeting, several questions were raised about the proposal, which the Legal Ethics Committee has examined. The LEC modified the language of the amendment to address some of those concerns.

First, the LEC removed additional references to “pro bono.” The removal of the additional language was specifically to avoid confusion as to the definition of pro bono. During debate at the 2022 House of Delegates, there was confusion as to whether pro bono meant that the client was not charged for services, or if the attorney did not receive payment for services. The latter interpretation led to concerns that the rule may not apply to legal aid programs that provide attorneys with a salary, but do not charge their clients. The LEC noted that Washington had the same concern and removed additional references to pro bono to clarify that nonprofit legal service and public interest organizations are covered under this Rule

Second, the LEC added “through a court appointment” to address concerns about the application of this rule in indigent defense. There was substantial concern raised at the 2022 House of Delegates meeting about the application of this Rule to indigent defense providers. The LEC opted to use the word court appointment to cover consortia that may only provide indigent defense as part of their practice and other areas of indigent defense, such as juvenile proceedings.

The LEC reviewed additional questions raised by the 2020 House of Delegates. They researched the issues as noted below:

1. The 2022 HOD raised questions about the liability of an attorney for providing gifts that may be used for substance abuse, and whether such liability would be covered by PLF coverage.

The LEC noted that the PLF responded that it is unlikely that an attorney would be found liable in a claim for relief related to a gift under 1.8(e)(3). PLF coverage always depends on the facts and circumstances of any given claim. However, it does not appear that this rule would generate a malpractice issue. The PLF also noted that education could be provided about possible risks and best practices. Additionally, this change to RPC 1.8(e)(3) does not obligate attorneys to provide financial assistance or other gifts to clients, and attorneys who had concerns about potential liability could choose not to give such assistance to clients.

The LEC opted to keep the current language based on this response.

2. The 2022 HOD also raised questions about whether the lack of a definition of modest would be a concern, and proposed language to provide limits to the value and the type of gifts (cash versus non-cash) that could be provided.

The LEC debated this issue and noted several concerns about adopting such language. The primary concern focused on the purpose of this rule, and that was to allow attorneys to provide a humanitarian response to many of the clients they provided services to without charge. The original amendment was proposed by the ABA Standing Committee on Ethics and Professional Responsibility and the Standing Committee on Legal Aid and Indigent Defendants to increase access to justice by allowing attorneys to provide some aid to their most vulnerable clients.

The original proposal noted that the ABA declined to define modest, or to create specific amounts. Part of the reason to decline to create a cap or define “modest” was to account for different costs of living within different jurisdictions. The LEC also noted that restrictions on the type of gift or the value of the gift, or reporting requirements would deter attorneys from utilizing the exception and render the exception ineffective. The ABA also noted that, in pro bono cases where this limited exception would apply, the potential for harm to the client by receipt of a gift, was remote.

The LEC opted to keep the current language based on this review.

The LEC reviewed this matter and discussed the importance of this amendment. It found that the proposed amendment is narrow enough to avoid many of the concerns related to attorneys providing financial assistance to clients in litigation. The narrowness of the rule avoids any potential for champerty and maintenance to occur under this exception. A review of past disciplinary matters under 1.8(e) was conducted as well, and it was noted that the limited violations that occurred were in the context of attorneys providing assistance to fee-paying clients, and not in a pro bono context.