Vol. 77, No. 3, March
2004
Supreme Court Orders
On April 21 the Wisconsin Supreme Court will hold a public
hearing to consider amending rules relative to the Lawyer Regulation
System, the Clients' Security Fund, and petitions for
reinstatement.
Order 04-01
In the matter of the Petition for Amendment to Rule 22.08,
Supreme Court Rules, Relating to the Lawyer Regulation
System
Order 04-01
On Jan. 14, 2004, the Director of the Office of Lawyer Regulation
filed a petition seeking amendment to Rule 22.08 of the Supreme Court
Rules. The amendment removes the right of a grievant to request review
by a referee in the event the Director fails to establish cause to
proceed after submitting the matter to a panel twice, and it requires
submission to two different panels instead of the same panel.
IT IS ORDERED that a public hearing on the petition shall be held in
the Supreme Court Room in the State Capitol, Madison, Wis., on April 21,
at 9 a.m.
IT IS FURTHER ORDERED that the court's conference in the matter shall
be held promptly following the public hearing.
IT IS FURTHER ORDERED that notice of the hearing be given by a single
publication of a copy of this order and of the petition in the official
state newspaper and in an official publication of the State Bar of
Wisconsin not more than 60 days nor less than 30 days before the date of
the hearing.
Dated at Madison, Wis., this 28th day of Jan., 2004.
By the court:
Cornelia G. Clark
Clerk of Supreme Court
Petition
The Petitioner, Keith L. Sellen, Director of the Office of Lawyer
Regulation, hereby petitions the Supreme Court of Wisconsin for an order
that amends Rule 22.08 of the Supreme Court Rules (SCR) relating to the
Lawyer Regulation System as follows.
PROPOSED AMENDMENT
SCR 22.08 Response to cause to proceed
determination.
(1)(a) If the preliminary review panel determines that the director
has not established cause to proceed in the matter, the director may
dismiss the matter, which is a final decision, or the director may
continue the investigation and resubmit the matter to the
same a different panel within a reasonable time after
the first panel's determination. The director shall notify the
respondent and the grievant of the decision to dismiss the matter or
continue the investigation.
(b) Following resubmission, if the panel determines that the director
has failed to establish cause to proceed, it shall report the
determination to the chairperson of the preliminary review committee,
who shall dismiss the matter and notify in writing the director, the
respondent, and the grievant of the dismissal.(c) The
chairperson A decision of the committee shall
notify the grievant in writing panel on resubmission
that the grievant may obtain review by a referee of the
chairperson's dismissal of a matter by submitting to the
director a written request. The referee shall be selected by the
clerk of the supreme court, based on availability and geographic
proximity has again failed to the respondent's
principal office, and appointed by the chief justice, or in his or her
absence, by the senior justice. The request for review must be received
by the director within 30 days after the date of the letter notifying
the grievant of the dismissal. The director may, upon a timely request
by the grievant for additional time, extend the time for submission of
additional information relating to the request for review. The decision
of the referee affirming the dismissal or referring the matter
establish cause to the director for further
investigation proceed is final, and there shall be no
review of the referee's decision.
(2) If the preliminary review panel or the panel on
resubmission determines that the director has established cause to
proceed in the matter, the director shall decide on the appropriate
discipline or other disposition to seek in the matter and may do any of
the following:
(a) Obtain the respondent's consent to the imposition of a public or
private reprimand.
(b) Divert the matter to an alternatives to discipline program as
provided in SCR 22.10.
(c) File with the supreme court and prosecute a complaint alleging
misconduct.
JUSTIFICATION
The present rule provides a right to the grievant to request review
by a referee in the event the director fails to establish cause after
twice submitting a matter to the same preliminary review panel. The
referee may affirm the panel decision, or may refer the matter to the
director for further investigation. The petition proposes that the
director may resubmit the matter for de novo consideration by the other
panel, but removes the right of a grievant to appeal to a referee.
Since the court established this rule in October 2000, one grievant
has requested review. In that case, the referee referred the matter to
the director. After further investigation, the director again presented
the matter for cause. The preliminary review panel found that the
director failed to establish cause. The director then dismissed the
matter.
Upon consideration of the rule in light of this experience, the
preliminary review committee, board of administrative oversight, and the
director believe the provision for referee review under SCR 22.08(c) is
not advisable.
At the point the right arises, the director has investigated the
matter, sought cause, further investigated the matter, and again sought
cause. The preliminary review panel has reviewed all the relevant
evidence and questioned the investigator on two separate occasions.
Further review by a referee does not add substantial value to the
process. That material considerations would be overlooked by the
director and preliminary review panel, but found by a single referee is
unlikely. That different, individual referees would apply judgment more
thoroughly or consistently than regular, standing panels of lawyers and
nonlawyers also seems unlikely.
Furthermore, the present procedure tends to prolong resolution.
Because the referee only may affirm or refer a matter back to the
director, a referee who refers a matter to the director leaves the
matter unresolved. On the other hand, for the reasons of thoroughness
and consistency cited in the previous paragraph, it would not be
advisable to vest authority to find cause in the referee on review.
If the director determines to resubmit a matter to the
preliminary review committee following a panel's decision that the
director has not established cause to proceed, the proposed revision
calls for the matter to be resubmitted to a panel other than the
one which first considered the matter, in lieu of referral to a single
referee. The purpose of this proposed change is to continue within the
rule the concept of full and independent consideration in the
nature of an appeal by an authority different from the one that
initially disposed of the matter. The benefit of this concept is to
assure each grievant that the matter has been fully and independently
assessed. This proposed change adds neither time nor complexity to the
process, other than requiring consideration de novo by the
second panel.
Respectfully submitted,
Keith L. Sellen, Director
Office of Lawyer Regulation
Clients' Security Fund, Petitions for
Reinstatement
In the matter of the Amendment of Supreme Court Rules 12.04
and 12.05 Clients' Security Fund and Supreme Court Rule 22.29 Petitions
for Reinstatement
Order
04-02
On Jan. 21, 2004, the Board of Governors of the State Bar of
Wisconsin filed a petition seeking amendment of Supreme Court Rules
12.04 and 12.05 related to Clients' Security Funds and 22.29 related to
Petitions for Reinstatement. The amendments would rename the Clients'
Security Fund the Wisconsin Lawyers' Fund for Client Protection and
would require that attorneys petitioning for reinstatement show that
they have reimbursed the fund for all payments made or provide an
explanation for not doing so.
IT IS ORDERED that a public hearing on the petition shall be held in
the Supreme Court Room in the State Capitol, Madison, Wis., on April 21,
at 9 a.m.
IT IS FURTHER ORDERED that the court's conference in the matter shall
be held promptly following the public hearing.
IT IS FURTHER ORDERED that notice of the hearing be given by a single
publication of a copy of this order and of the petition in the official
state newspaper and in an official publication of the State Bar of
Wisconsin not more than 60 days nor less than 30 days before the date of
the hearing.
Dated at Madison, Wis., this 28th day of Jan., 2004.
By the court: Cornelia G. Clark
Clerk of Supreme Court
Petition
To the Justices of the Wisconsin Supreme
Court:
I. The Board of Governors of the State Bar of Wisconsin hereby
petitions the Wisconsin Supreme Court to amend SCR 12.04 and 12.05 so as
to rename the Clients' Security Fund the Wisconsin Lawyers' Fund for
Client Protection. Such a change requires the following specific
amendments:
SCR 12.04 Clients' security fund
Wisconsin Lawyers' Fund for Client Protection: creation and
purpose; definitions.
(1) A clients' security fund Wisconsin Lawyers'
Fund for Client Protection of the state bar of Wisconsin is created
to reimburse, to the extent and in the manner provided by this chapter,
losses caused by the dishonest conduct of members of the state bar of
Wisconsin.
(2) In this chapter:
(d) "Committee" means the clients' security fund
Wisconsin Lawyers' Fund for Client Protection committee.
(f) "Fund" means the clients' security fund
Wisconsin Lawyers' Fund for Client Protection of the state bar of
Wisconsin.
SCR 12.05 Administration.
(1) The fund shall be operated and administered by the committee of
the state bar to be known as the clients'security fund
Wisconsin Lawyers' Fund for Client Protection committee.
II. The Board of Governors of the State Bar of Wisconsin further
petitions the Wisconsin Supreme Court to amend SCR 22.29(4)(m) as
follows:
SCR 22.29 Petition for reinstatement.
(4) The petition for reinstatement shall show all of the
following:
(m) The petitioner has made restitution to or settled all claims of
persons injured or harmed by petitioner's misconduct, including
reimbursement to the Wisconsin Lawyers' Fund for Client Protection for
all payments made or if not, the petitioner's explanation of the
failure or inability to do so.
DISCUSSION
The Clients' Security Fund ("fund") was established in 1981 to
financially compensate clients who have lost money or other property
because of the dishonest conduct of their attorneys. The Board of
Governors petitions to rename the fund the "Wisconsin Lawyers' Fund for
Client Protection." This request reflects amendments to the ABA Model
Rules for Lawyer's Funds for Client Protection. The original Model
Rules for Clients' Security Funds were approved by the House of
Delegates of the American Bar Association in 1981. Virtually every fund
created pursuant to those rules adopted the recommended name "Clients'
Security Fund." In 1989, the title of the Model Rules was changed to the
Model Rules for Lawyers' Funds for Client Protection. Since
that time state funds have been encouraged to adopt the new name, which
is more descriptive of the funds' purpose. As of this writing
approximately 20 state funds still use the old name, including
Wisconsin.
The second request is to amend SCR 22.29 to require that any attorney
seeking reinstatement of a suspended or revoked license be required to
reimburse the fund for any payments made to injured clients as a result
of the attorney's conduct, or to explain why this is not possible.
Currently, SCR 22.29 requires an attorney only to make restitution to
injured clients or provide an explanation why this is not possible. The
section makes no mention of payments that may have been made by the
fund. Although the Office of Lawyer Regulation has been helpful in
seeking fund reimbursement as a condition of reinstatement, the Board of
Governors believes reimbursement should be a condition of reinstatement.
Fund payment to a client signifies that the lawyer's dishonest conduct
caused a loss that was restored through an assessment against all
members of the bar. The attorney responsible should be required to
reimburse the fund before resuming practice.
The Board recognizes that in certain cases it may not be possible for
an attorney to make full restitution to injured clients and to the fund.
When this has occurred in the past, the fund has deferred its right to
reimbursement until the clients have been made whole. SCR 22.29 requires
that where full restitution is not accomplished the petitioning attorney
explain why. This requirement provides the court the latitude necessary
to balance the rights of the petitioning attorney with the goals of
fully restoring injured clients and reimbursing the state bar client
protection fund.
The undersigned respectfully submits this petition on behalf of the
Board of Governors and prays for an order accordingly.
R. George Burnett, President
State Bar of Wisconsin
Wisconsin Lawyer
