Also known as: financial interests · pecuniary interest
Written by attorneys — see sources below.
An interest involving money or its equivalent. The interest commonly takes the form of an investment or other stake that can be affected by the outcome of a transaction or proceeding.
Antonio told Elena that he had overridden safety systems at the plant to avoid termination. A reasonable person in his position would have made that admission only if he believed it true because it exposed him to loss of his job and civil liability. Elena's testimony about the statement is offered in a later negligence suit.
A lawyer learns that a client is using the lawyer's services to carry out a scheme that will cause substantial monetary loss to third parties. The lawyer reasonably believes disclosure is necessary to stop the ongoing fraud. The lawyer may reveal information relating to the representation to prevent the injury.
A client has already committed fraud through the lawyer's prior services and the resulting harm to another party's property is reasonably certain to occur. The lawyer may disclose information to mitigate or correct the substantial financial damage that has resulted from the client's conduct.
A lawyer proposes to purchase property from a client on terms that give the lawyer an ownership stake directly opposed to the client's interests. The lawyer must ensure the transaction is fair and reasonable, fully disclose the terms in writing, and advise the client to seek independent counsel before proceeding.
A product reviewer wrote a negative article about a competitor's speakers while holding a patent on a rival design that would gain value if the competitor's product failed. The court examined whether the reviewer's ownership interest created bias that affected the truth of the published statements.
In May 1970, Consumers Union published a seven-page article in Consumer Reports. The article evaluated medium-priced loudspeakers and included a boxed section on the Bose 901 system manufactured by Bose Corporation. The article described the system as unique and unconventional. It stated that individual instruments heard through the Bose system seemed to grow to gigantic proportions and tended to wander about the room. A violin appeared ten feet wide and a piano stretched from wall to wall. Bose Corporation took exception to the statements. After Consumers Union refused to publish a retraction, Bose filed a product disparagement action in the United States District Court for the District of Massachusetts. After protracted pretrial discovery, the district court denied summary judgment and conducted a nineteen-day bench trial on liability. At trial, engineer Arnold Seligson, who supervised the listening tests and prepared the internal report on which the article was based, testified for nearly six days. His initial report used the phrase “wander around the room.” During cross-examination he drew a sketch showing back-and-forth movement along the wall between the speakers. He explained that the word “about” meant what he had drawn. The district court found that the perceived movement was along the wall rather than about the room. It found the published statement false and disparaging. It found Seligson’s testimony claiming the words meant lateral movement not credible. It concluded that the statement had been published with actual malice. The Court of Appeals for the First Circuit reversed. It accepted the disparaging character of the statement but held that it would conduct a de novo review of the actual-malice determination rather than apply the clearly-erroneous standard. The Supreme Court granted certiorari to consider whether the Court of Appeals had erred in refusing to apply Rule 52(a).
View caseAn attorney helped organize litigation by soliciting clients for a civil rights organization in exchange for a share of any recovery. The arrangement gave the attorney a direct financial stake in the outcome of the suits she helped initiate.
In the summer of 1973, local and national newspapers reported that pregnant mothers on public assistance in Aiken County, South Carolina, were being sterilized or threatened with sterilization as a condition of continued receipt of medical assistance under the Medicaid program. Gary Allen, an Aiken businessman and officer of a local organization serving indigents, called the South Carolina Council on Human Relations requesting that one of its representatives come to Aiken to address some of the women who had been sterilized. At the Council's behest, appellant, who had not known Allen previously, called him and arranged a meeting in his office in July 1973. Among those attending the July 1973 meeting was Mary Etta Williams, who had been sterilized by Dr. Clovis H. Pierce after the birth of her third child. Williams and her grandmother attended because Allen, an old family friend, had invited them. At the meeting, Primus advised those present, including Williams, of their legal rights and suggested the possibility of a lawsuit. Early in August 1973 the ACLU informed Primus that it was willing to provide representation for Aiken mothers who had been sterilized. After being advised by Allen that Williams wished to institute suit against Dr. Pierce, Primus decided to inform Williams of the ACLU's offer of free legal representation. Primus sent Williams a letter dated August 30, 1973, on the stationery of the Carolina Community Law Firm, notifying her that the ACLU would like to file a lawsuit on her behalf for money against the doctor and offering to explain what was involved. Williams showed the letter to Dr. Pierce's lawyer during a visit to discuss her child's illness, signed a release of liability in the doctor's favor, and called Primus from the doctor's office to announce her intention not to sue. There was no further communication between Primus and Williams. On October 9, 1974, the Secretary of the Board of Commissioners on Grievances and Discipline of the Supreme Court of South Carolina filed a formal complaint charging that Primus had engaged in solicitation in violation of the Canons of Ethics by sending the August 30, 1973, letter to Williams. The complaint was heard by a panel of the Board on March 20, 1975. The State's evidence consisted of the letter, the testimony of Williams, and a copy of the summons and complaint in the action instituted against Dr. Pierce and various state officials, Walker v. Pierce. Following denial of Primus's motion to dismiss, she testified in her own behalf and called Allen, several ACLU representatives, and several character witnesses. The panel filed a report recommending that Primus be found guilty of soliciting a client on behalf of the ACLU in violation of Disciplinary Rules 2-103(D)(5)(a) and (c) and 2-104(A)(5) and that a private reprimand be issued. After a hearing on January 9, 1976, the full Board approved the panel report and administered a private reprimand. On March 17, 1977, the Supreme Court of South Carolina entered an order which adopted verbatim the findings and conclusions of the panel report and increased the sanction to a public reprimand. Primus filed a jurisdictional statement on July 9, 1977, and the United States Supreme Court noted probable jurisdiction on October 3, 1977.
View caseA statement qualifies when a reasonable person in the declarant's position would have made it only if believing it true because it was contrary to the declarant's proprietary or pecuniary interest. The statement must expose the declarant to loss of money or property or to civil or criminal liability.
A lawyer may reveal information when necessary to prevent the client from committing a crime or fraud that is reasonably certain to cause substantial injury to the financial interests or property of another and in which the client has used the lawyer's services. Disclosure is also permitted to mitigate or rectify such injury after it has occurred.
A lawyer may not enter a business transaction with a client or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to the client unless the transaction is fair and reasonable, the terms are fully disclosed in writing, the client is advised to seek independent counsel, and the client gives informed consent confirmed in writing.
A judge must disqualify when the judge, the judge's spouse, or a minor child residing in the household has a financial interest in the subject matter in controversy or in a party. Financial interest includes ownership of a legal or equitable interest however small, subject to narrow exceptions for mutual funds and certain organizational offices.
…has been suggested that the state law may contain an invidious discrimination because it treats those organizations that have a pecuniary interest in litigation (for example, an insurance company) differently from those that do not. But surely it cannot be said that this distinction, which is so closely related to traditional concepts…