NEW YORK STATE BAR
Opinion #647 - 06/08/1993 (2-93)
Topic: Attorneys; bail bond agent
Digest: If not illegal, an attorney ethically may act
as a bail bond agent for non-client, but may not for client
Code: DR 1-102; DR 2-103; DR 103(B)(1); EC
May an attorney ethically act as a bail bond agent or
have an interest as a shareholder in an insurance agency selling bail
bonds to (1) clients and (2) non-clients?
The question posed requires an interpretation of
Insurance Law §6804(c) (*1) which provides:
Any member of the bar having any financial interest by
which he is to profit from the giving of bail shall be guilty of a
A literal reading of this section seems to answer the
question directly by making it an illegal practice for an attorney to
profit from the sale of bail bonds. Illegal conduct is per se unethical.
DR 1-102; EC 1-5; N.Y. State 576 (1986); N.Y. State 499 (1978). The
interpretation and application of the Insurance Law are not within the
jurisdiction of this Committee.
We note, however, that the Attorney General, in a 1945
opinion interpreting the identical language then found in the Code of
Criminal Procedure §554-b(5), concluded that the Superintendent of
Insurance was not precluded from issuing a license to attorneys who
solicit bail bonds "as regular agents of an insurance company." The
opinion went on to state that the statutory language should not be
construed as disqualifying a practicing attorney, who desires to perform
the usual and ordinary functions of an agent, from obtaining a license
as a bail bond agent of a recognized insurance company. Ordinarily, the
only financial interest which a bail bond agent, whether or not a member
of the Bar, would have in furnishing a bail bond, would be the usual and
regular commission to be received upon the premiums for the bond. The
quoted statutory language, the Attorney General held, must "therefore,
be held to prohibit only direct or indirect compensation received by
attorneys upon the issuance of bail bonds, other than the ordinary
commission which may be earned by any licensed agent." 1945 N.Y. Op.
Att'y Gen. 200.
Assuming there is no legal impediment to an attorney
acting as a bail bond agent or having an interest as a shareholder in an
insurance agency that sells bail bonds, the ethical issues turn on a
number of factors.
An attorney may participate in an independent business
providing no conflict of interest results. N. Y. State 556 (1984); N.Y.
State 493 (1978). Because an attorney simply would be receiving ordinary
commissions on the sale of the bonds through a separate business, a
conflict of interest with a person who is not a client is remote.
The bail bond agency may not be used to solicit
clients for the attorney's law practice in violation of any statute or
rule. N.Y. Judiciary Law §479; DR 2-103; N.Y. State 556 (1984).
Whether the proposed conduct violates any rule against solicitation is a
question of law. N. Y. State 556 (1984). As an ethical matter, we
conclude that even with the full disclosure contemplated by N.Y. State
576 (1986) (allowing real estate attorneys to also act as agents for
title insurance companies) and N.Y. State 549 (1983) (allowing an
attorney to accept referrals from a collection agency in which the
lawyer has an interest), because of the vulnerability of one accused of
a crime, the disclosure ordinarily will not obviate the conflict. The
lawyer's interest may be to protect the insurance company by assuring
the defendant appears at trial, even though the whereabouts of the
defendant may be a secret. The accused ordinarily will not be in a
position to give informed consent.
Thus, assuming no legal barrier exists, an attorney
ethically may profit from an insurance agency's sale of bail bonds so
long as the lawyer does not represent the person for whom the bond is
posted. N.Y. State 595 (1988).
For the reasons stated above, the first question is
answered in the negative and the second question is answered in the
(*1) The current §6804(c) of the Insurance Law of
New York was originally the last sentence of §554-b(5) of the New
York Code of Criminal Procedure. Section 554-b was added to the Code in
1922. In 1970, the Code of Criminal Procedure was repealed and replaced
in 1971 by the new Criminal Procedure Law without the various provisions
contained in §554-b(5). Shortly thereafter, also in 1971,
§331-a(4) was added to the Insurance Law and this section was
identical to §554-b(5) of the old Code. Then, in 1984, the
Insurance Law was amended (re-arranged) and §331-a(4) was adopted
verbatim as §6804.
(*2) Where an attorney personally advances funds to a
client for bail bond premiums or for bail itself, however, there is
conflict of interest. DR 5-103(B)(1). See Suffolk County 87- 7 (undated)
indexed in ABA/BNA Lawyers' Manual on Professional Conduct 901:6303
(interpreting Insurance Law §6804[c]). The concern is that an
attorney in such a situation would place the attorney's own recovery
ahead of their client's, resulting in an obvious conflict.