Written by attorneys · grounded in primary & secondary sources — see below
2 senses
An advance of funds or payment of expenses by a lawyer to a client. The advance is forbidden when made in connection with pending or contemplated litigation except for court costs and expenses of litigation that may be repaid contingently on the outcome.
The making or purchasing of loans or other financial support extended for the acquisition, construction, improvement, repair, or maintenance of a dwelling. Such assistance is subject to prohibitions against discrimination on the basis of race, color, religion, sex, disability, familial status, or national origin.
Each sense below has its own examples, sources, and questions.
An advance of funds or payment of expenses by a lawyer to a client. The advance is forbidden when made in connection with pending or contemplated litigation except for court costs and expenses of litigation that may be repaid contingently on the outcome.
Jacob retained Murray on a contingency basis to pursue a products liability action after a workplace injury left him unable to work. Jacob fell behind on his home mortgage and faced foreclosure. Murray offered to pay the full overdue amount directly to the lender so Jacob could attend depositions without distraction. The payment addressed a personal living expense unrelated to court costs or litigation expenses.
A lawyer may advance court costs and expenses of litigation such as filing fees, service fees, discovery costs, and expert witness fees. Repayment of those advances may be made contingent on the outcome of the matter. A lawyer representing an indigent client may pay such costs outright. Modest gifts for basic living expenses are permitted only when the lawyer represents an indigent client pro bono through a qualifying nonprofit or clinical program and satisfies strict conditions on timing, reimbursement, and advertising.
The prohibition applies to ordinary living expenses. Rent, groceries, utilities, and similar personal costs fall outside the permitted categories of court costs and litigation expenses. Advances for these items create an improper financial stake in the litigation outcome and risk undue influence over the client.
The exception applies only when the lawyer represents an indigent client through a nonprofit legal services organization, public interest organization, or law school clinic. The gifts must be modest, limited to basic needs such as food and rent, and must not be promised before retention or used as an inducement to continue the relationship. The lawyer may not seek reimbursement or advertise the availability of the gifts.
The making or purchasing of loans or other financial support extended for the acquisition, construction, improvement, repair, or maintenance of a dwelling. Such assistance is subject to prohibitions against discrimination on the basis of race, color, religion, sex, disability, familial status, or national origin.
Fairfield Bank refused to make a mortgage loan to Fumiko Fujimoto for the purchase of a single-family home. The bank cited neighborhood demographics rather than Fujimoto's credit history or income. The refusal occurred in the course of the bank's ordinary residential lending business. Fujimoto alleges the denial constituted discriminatory financial assistance under the Fair Housing Act.
The Act prohibits discrimination in the making or purchasing of loans or the provision of other financial assistance for purchasing, constructing, improving, repairing, or maintaining a dwelling when the discrimination is based on race, color, religion, sex, disability, familial status, or national origin. The prohibition covers both the decision to extend assistance and the terms or conditions on which it is offered.