August 31, 2018

The New York City Bar ethics committee recently issued Formal Opinion 2018-5: Litigation Funders’ Contingent Interest in Legal Fees.

By Anthony E. Davis and Anthony J. Sebok

August 31, 2018 New York Law Journal - The New York City Bar ethics committee (the committee) recently issued Formal Opinion 2018-5: Litigation Funders’ Contingent Interest in Legal Fees (Opinion 2018-5). For the reasons we will set out in this article, Opinion 2018-5 incorrectly interprets New York Rule of Professional Conduct (RPC) 5.4 dealing with lawyer independence, specifically determines to be unethical activities far less intrusive on lawyer independence than many lending practices that have been accepted and used by almost every law firm for decades, and drives a wedge between settled New York case law and—if the committee’s interpretation of RPC 5.4 were correct—the ethics rules. 

Read Professor Sebok's op-ed in the New York Law Journal.