June 25, 1991
It is not unethical for a lawyer to pay to the court a security for court costs on behalf of an indigent client.
References: MRPC 1.8(e), 1.8(j); MCR 2.109(D).
A lawyer represents an indigent plaintiff in a matter. After considering the plaintiff's affidavit of indigency, the trial judge in the matter granted defendant's Motion for Security for Costs in the amount of $1500, to be paid within 30 days or plaintiff's claim would be dismissed with prejudice. The plaintiff's lawyer asks whether the law firm may pay the security on behalf of the client.
MRPC 1.8(e) states:
"A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:
"(1) a lawyer may advance court costs and expenses of litigation, the repayment of which shall ultimately be the responsibility of the client; and
"(2) a lawyer representing an indigent client, may pay court costs and expenses of litigation on behalf of the client."
MCR 2.109(D) provides that the court may order new or additional security at any time if the original amount of the bond proves insufficient, and that a person who becomes a new or additional surety is liable for all costs from the commencement of the action, as if he or she had been the original surety. A lawyer's continuing duty to support a client's litigation through payment of court costs would arguably give the lawyer an interest in the subject matter of the litigation, in violation of MRPC 1.8(j).
Money needed to post security for costs of the opposing side in order to proceed with the claim which otherwise would be dismissed is clearly an "expense of litigation." If the client is in fact indigent, the payment of such expenses by the lawyer is specifically permitted under MRPC 1.8(e)(2).
MCLA 600.2665 states:
"No practicing attorney or counselor shall become a surety or post bond for any client in criminal or civil matters. This section shall not apply to any bond of $100.00 or less required to be filed by a fiduciary in the probate court."
Whether the contemplated action violates MCLA 600.2665 is a question of law beyond the jurisdiction of this Committee. It is likely, however, that the statute was intended to address situations where the financial liability of a lawyer is affected by client conduct, e.g., a client's appearance or performance in a matter. When, however, as in this case, the lawyer advances security for costs, the lawyer acquiesces in having the amount used to pay the costs and agrees either not to be reimbursed at all or to look only to the proceeds of the recovery for reimbursement. Under those circumstances, there is no conflict between the lawyer's duties to the client and the lawyer's duties to the lawyer or a third party, MRPC 1.7(b).