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In a close vote, the Florida Bar’s professional ethics committee approved an advisory opinion Thursday that would make it ethically acceptable for attorneys to help their clients obtain monetary advances from companies that seek a percentage of their legal winnings. It was the Bar’s first official endorsement of the controversial practice. The committee, which issues nonbinding ethical opinions to guide the behavior of the state’s lawyers, voted 17-14, with two abstentions, to approve the new opinion. The opinion allows an attorney, if requested by a client, to direct his or her client to a litigation funding company and provide information about the client’s case to the company. The vote took place during the Bar’s annual meeting in Orlando last week. The new advisory opinion does not allow lawyers to sign letters of protection to the litigation funding company on behalf of their clients to assure that the client will repay the company if the suit is successful. But attorneys may “honor” a letter of protection signed by their clients. A minority of the committee’s members argued that if attorneys are allowed to honor letters of protection, they should be allowed to sign them as well. “It was a tough debate for the ethics committee,” says Elizabeth Tarbert, head of the Bar’s ethics and advertising department. “Everyone has a different view of how involved an attorney should be in the loan process.” Litigation financing companies, which began operating in Florida only in the last several years, provide money upfront to cash-strapped clients and only recover the principal and interest if the plaintiff wins a judgment or settlement. Litigation funding has become a controversial issue among attorneys and business groups, which fear it could lead to an increase in lawsuits. It also has come under scrutiny recently by Florida banking regulators, who are concerned about the high interest rates charged by some companies. Tarbert says she expects litigation funding companies to be disappointed with the opinion because they prefer the attorney’s signature on the letter of protection. That’s because a promise from a poor client is considered to be less reliable than an attorney’s promise, she says. “Sure, the client can promise,” she says. “But the finance companies’ position is that doesn’t mean a thing.”

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