UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.
Ethics Advisory Opinion 92-05
Attorneys has been asked by a client to represent him to collect funds in the amount of $10,000.00 from his ex-wife. The funds were awarded to the client in a prior Decree of Divorce, but he has never received the money.
Question:
May an attorney take a case on a contingent fee basis to collect funds due under a property division previously ordered in a decree of divorce?
Summary:
A contingent fee is appropriate in this case because the payment of the fee is not contingent upon the obtaining of the divorce or the original award of the specific amount of the property division. The over-all fee must still be reasonable as set out in Rule 1.5(a).
Opinion:
Rule 1.5 (d) (1) of the Rules of Professional Conduct first prohibits contingent fees in a domestic relations matter if the fee is contingent upon the securing of a divorce. In this case, the divorce has already been secured, so this prohibition is not relevant.
Second, Rule 1.5 (d) (1) prohibits a domestic relations contingent fee if the fee "is contingent upon... the amount of alimony or support, or property settlement in lieu thereof..." In this case, the amount of the property award has already been set. Only the collection has yet to occur, so this prohibition is not relevant.
There may be a possible second reason why the contingent fee is legal. If the property settlement is not "in lieu of" alimony or support, this portion of Rule 1.5 (d) (1) would legitimize the fee. This depends on the unique facts of each case.
Rule 1.5 (d) (1) specifically states that a contingency fee is proper in collecting past due alimony and child support, but this list does not purport to be an exclusive list. The significant point is that the category of prohibited conduct does not embrace that discussed herein.
In Glasscock v. Glasscock, 403 S.E. 2d 313 (1991) the S.C. Supreme Court stated broadly that a contingency fee is not permissible in a domestic case. However, Glasscock involved a divorce which had not been obtained at the time of the relevant fee agreement. While the language in Glasscock is broad, the Court did not expressly rescind the language of Rule 1.5 (d) (1). The policy reason for prohibiting a contingent fee in a prospective domestic relations matter is to prevent the attorneys from frustrating the stated policy of South Carolina law to encourage reconciliation. A lawyer cannot fulfill this duty if he is paid a contingent fee to obtain an award which requires a divorce or separation as a prerequisite. Once the parties are already divorced, the above policy reason is inapplicable. Thus a contingent fee in this case is consistent with both the language of Rule 1.5 (d) and the policy reason behind the rule.