New York State Bar Association Committee on Professional Ethics
Disbursements – Interest on reimbursement
Ethics Opinion 1181
Background: The inquiring attorney’s practice includes matters done on a contingency fee basis. Some recent changes in contingency fee cases have sowed some confusion about prior opinions on a lawyer’s ability to charge interest on disbursements. This is due to changes in the law that allows lawyers to fund disbursements rather than seek immediate reimbursement from the client.
Opinion: The Committee concluded that a New York contingency-fee attorney may impose an interest charge on unpaid disbursements if a written agreement signed by the client fully discloses the terms on which interest may be charged and the terms are reasonable.