is it illegal for lawyers to give loans against a lawsuit
1 Answer from Attorneys
Yes. If a lawyer loans money to his client on a lawsuit he can be disbarred. There are specific ethics rules that apply to lawyers. One of those rules specifies that a lawyer cannot have a vested interest in his client's case, i.e. cannot loan a client money against a lawsuit. If lawyers were allowed to give loans then certain lawyers might give big loans in order to get the best cases. Also, it would give the appearance that the lawyer was representing primarily himself (because he was owed money) instead of looking out for the best interest of his client.
However, there are several lending companies that will loan money against a lawsuit. These are legal in S.C. They usually require your attorney to complete part of the loan application verifying that you have a good case. The lawyer does not receive any money from the loan company. The interest rates for these loans are usually extremely high.