State Bar of Wisconsin

Vol. 77, No. 3, March 2004

Supreme Court Orders

• Order 04-01
• Order 04-02

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