March 04, 2008
Highlights of VSB Council Meeting - March 1, 2008
At its regular meeting on March 1, 2008, in Richmond, the Virginia State Bar Council heard the following significant reports and took the following actions:
Mandatory Malpractice Insurance Proposal
The council voted 44 to 7 to not publish for comment the VSB Special Committee on Lawyer Malpractice Insurance’s proposal for mandatory legal malpractice insurance. Instead the VSB will notify Virginia’s lawyers about the concepts involved in the proposal. The proposal will be an information item on the agenda for the June 2008 council meeting.
Random Trust Audits and Settlement Notifications
President Howard W. Martin Jr. will ask the Standing Committee on Lawyer Discipline to study the idea of random audits of lawyer trust accounts. His request followed news reports about a Virginia Beach lawyer revoked for misusing clients’ money. The VSB Executive Committee approved referral of the matter to COLD. In addition, the issue of notification by insurance companies to clients when cases are settled, rejected by the council in October 2007, will be sent back to the Public Protection Task Force in light of the recent discovery of millions of dollars in defalcations by a Woodbridge lawyer who settled clients’ cases without their knowledge and kept their money. Representatives of other statewide bar groups will be added to the task force for the study.
Size of Council — Proposed Rule Change
The number of lawyers in a circuit that triggers an increase in representation on the council would increase from four hundred to five hundred, with the number determined on February 1 of each year, under a proposed rule change approved by the council. The proposal will be presented to the Supreme Court for consideration.
ALPS Reported to Be in Best Financial Shape Since 2001
Robert W. Minto Jr., president and chief executive officer of ALPS — the bar’s endorsed malpractice carrier — reported that the company is in its best financial shape since its association with the VSB began in 2001. Responding to inquiries by bar members about reports that ALPS had been downgraded by insurance evaluator A.M. Best, Minto explained that ALPS received an A-minus (Excellent) rating by A.M. Best in 2003, and it was given a “negative outlook” in 2005 due to perceived deficiencies in its reserves. Its rating has not changed in any respect since 2005, and Minto told the council that ALPS is committed to long-term financial strength. ALPS will be reevaluated by A.M. Best in March, and Minto is hopeful that the “negative outlook” will be replaced by a “stable” finding as a result of that review.
Undisclosed Recordings — Amendment to Rule 8.4
The Supreme Court of Virginia asked that the VSB republish for comment proposed amendments to Rule 8.4, which would clarify that it is not necessarily unethical to permit or engage in undisclosed recordings. Roger T. Creager, chair of the Standing Committee on Legal Ethics, reported that the committee considered the comments and elected to notify the Court in a letter dated February 8, 2008, that the amendments should stand as recommended in the original petition to the Court. The council voted to authorize the bar president to notify the Court of its approval of the ethics committee’s position.
Proposed changes to rules 5.5 and 8.5 and new rule 1A:7 are to be presented to the Supreme Court for approval, after having been approved without opposition by the council on March 1, 2008. The proposed amendment to Rule 5.5 permits practice by non-Virginia-licensed lawyers on a “temporary and occasional basis” under limited circumstances. Legal services provided by a non-Virginia attorney, other than as authorized by the rule, would become a disciplinary matter, as opposed to an unauthorized practice of law matter. Part 6, § I (C) of the Rules of the Supreme Court would be eliminated, and the UPL Committee would deal only with unauthorized practice of law by nonattorneys. The proposed amendment to Rule 8.5 extends the disciplinary authority of the Virginia State Bar to any lawyer who provides or holds out to provide legal services in Virginia, regardless of where the lawyer is licensed. The rule also addresses the choice of law to be applied in disciplinary cases concerning non-Virginia-licensed attorneys. Proposed rule 1A:7 regulates foreign legal consultants and the circumstances under which they can practice law in Virginia. The proposed rule carves out a limited role for foreign legal consultants. An FLC would be permitted to render legal services only in matters involving international law or the law of the foreign nation in which the person is admitted to practice. An FLC could not appear before any Virginia court or hold himself or herself out as a member of the Virginia State Bar.
Ed Walters, president of Fastcase, the bar’s provider of free online legal research, reported that almost ten thousand active lawyers in Virginia have logged onto Fastcase. Daily use has nearly doubled since the program became a VSB member benefit in 2006. The service has expanded its capability by offering public records and legal forms on a transactional basis. Fastcase’s Authority Check has been improved, although Walters indicated that the Authority Check feature is not a substitute for using Shepard’s, which is available for a fee through Fastcase. Fastcase has agreed to include retired VSB members as users without additional cost to the bar. The bar is considering adding circuit court opinions and Virginia model jury instructions to the searchable database.
CRESPA Bond Increase
Updated: Mar 26, 2008
VSB Executive Director Karen A. Gould reported to the council that Senate Bill 149, which would increase the Consumer Real Estate Settlement Protection Act surety bond from $100,000 to $200,000, passed both houses of the General Assembly without opposition. Sen. Walter A. Stosch introduced the bill after the VSB Council and the Supreme Court authorized the VSB to seek the increase.