QUESTION

Can my attorney or his friend (also an attorney) lose their licenses because of an out-of-pocket expense they paid, due to my running out of resources

Asked on Mar 29th, 2015 on Contracts - Kentucky
More details to this question:
I am a plaintiff in a case taken on fee contingency, but I have had to pay all out-of-pocket expenses for motions filed, depositions taken, etc. At one point my attorney was cited for contempt and spent a night in jail on a matter of principle, but during that time he had to file several motions on my behalf at a cost of $7500. I had no money, so a friend of his (an attorney) paid the $7500. My attorney told me that his friend could lose his license for doing so. Nine months later my attorney contacted me urgently and told me that I had to overnight $7500 to his friend along with a notarized letter providing an explanation for the delay (illness, stress, etc). This urgency was because his friend was being audited and had to cover that expense. My question is: On what basis could his friend lose his license, and is my attorney at risk too?
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1 ANSWER

Appellate Practice Attorney serving New York, NY
Attorneys are not supposed to enage in "champerty", i.e. to encourage litigations by financing them.  Although in modern times attorneys are allowed to agree to contingency fees (for most types of claims), they are not supposed to pay the expenses of litigation (i.e. filing fees, court reporter fees, etc.)  Both your attorney and his friend could be at risk.  However, different jurisdictions have slightly different rules in this regard, and also different penalties.  I don't know exactly how the practice is viewed in Kentucky. 
Answered on Mar 30th, 2015 at 9:13 AM

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