|2000 House of Delegates Meeting|
Sheraton Portland Airport Hotel
8235 N.E. Airport Way
Saturday, September 23, 2000, 10:00 a.m.
Dear OSB Member:
Enclosed is your agenda for the 2000 OSB House of Delegates Meeting, which will be held on Saturday, September 23, 2000, at the Sheraton Portland Airport Hotel. It begins at 10:00 a.m. Although only delegates may vote on the resolutions, members are encouraged to participate in the discussion and debate of these items. If you are unable to attend, please contact one of your delegates to express your views on the resolutions. Delegates are listed in the August/September issue of the Bulletin and on the bar’s web page.
Matters that will be considered by the HOD include a $50 increase in the annual membership fee, amendments to DR 5-106 (Mediation), DR 5-105(G) (Vicarious Disqualification of Affiliates), ORS 9.136-9.152 (HOD term limits and membership changes), DR 1-103(E)(2) (Disclosure of Information to Authorities), and a resolution regarding Multidisciplinary Practice (MDP), and other important matters. The full text and explanatory statements for all resolutions are in the enclosed agenda. If you have any questions about the House of Delegates meeting, contact Sandy Hise, Executive Assistant, at 800-452-8260 or (503) 620-0222, ext. 386, or by e-mail at email@example.com.
I also encourage you to attend the Annual Awards Luncheon, which will be from 12 noon to 2:00 p.m. on Friday, September 22 at the Sheraton Portland Airport Hotel. Tickets ($26 per person) can be obtained by calling Jennifer Maldonado at ext. 377. Our special award honorees are:
I look forward to seeing you at these events in Portland!
Lawrence B. Rew, President
Oregon State Bar
OREGON STATE BAR
2000 House of Delegates Meeting
Sheraton Portland Airport Hotel
8235 N.E. Airport Way
Saturday, September 23, 2000, 10:00 a.m.
Presiding Officer: Lawrence B. Rew, President
1. Call to Order
Lawrence B. Rew
2. Overview of Parliamentary Procedure
Lawrence B. Rew
3. Report of the President
Lawrence B. Rew
4. Board of Governors/PLF Board action regarding governance and operation of Professional Liability Fund
Lawrence B. Rew and Thomas C. Peachey
5. Adoption of Final Meeting Agenda
Lawrence B. Rew
6. Report of the Chair of the BOG Budget and Finance Committee
David A. Hytowitz
Items with Financial Impact
BOG Resolution No. 1
Presenter: David A. Hytowitz
8. Supports Ballot Measure 94 – Repeals Measure 11 mandatory minimum sentencing requirements
Delegate Resolution No. 4
Presenter: Susan Elizabeth Reese
Items with Legislative Implications
9. Amends ORS 9.136-9.152 – OSB House of Delegates
BOG Resolution No. 4
Presenter: John J. Tyner III
10. In Memoriam
BOG Resolution No. 2
Presenter: Lawrence B. Rew
11. Amends DR 5-106 and DR 5-105(G) - Mediation
BOG Resolution No. 3
Presenter: Hon. Kristena LaMar
12. Proposed study of Multidisciplinary Practice issue (MDP)
BOG Resolution No. 5
Presenter: Edwin A. Harnden
13. Opposes Initiative Measure
(Limits state appropriations to percent of prior state personal income) and Initiative Measure 91 (Full deductibility of federal income taxes on state income taxes )
BOG Resolution No. 6
Presenter: David M. Orf
14. Proposes to reestablish annual OSB convention
BOG Resolution No. 7
Presenter: Charles R. Williamson III
15. Amends DR 1-103(E)(2) – Disclosure of Information to Authorities
BOG Resolution No. 8
Presenter: Sarah K. Rinehart
16. Proposed election to HOD of chief delegate and regional delegates
Delegate Resolution No. 1
Presenters: Mike Phillips andRoss Shepard
17. Proposed future House of Delegates role concerning the operation of the PLF
Delegate Resolution No. 2
Presenter: Trina E. Laidlaw
18. Amends DR 5-103(B) – Recovery of Costs from Clients
Delegate Resolution No. 3
Presenter: Bruno J. Jagelski
Items with Financial Impact
7. 2001 Fee Resolution (BOG Resolution No. 1)
Resolved, that the 2001 annual membership fees be increased from the year 2000 amount by $50.00 and that the Client Security Fund assessment be unchanged from the 2000 year, and shall be as follows:
1. Active Members.
A. For members admitted in any jurisdiction before January 1, 1999: $371.00 for the basic membership fee; $30.00 for the Affirmative Action Program fee; and $15.00 for the Client Security Fund assessment; for a total of $416.00.
B. For members admitted in any jurisdiction before January 1, 1999 who fail to pay their active fees and assessments of $416.00 by the due date: $466.00.
C. For members admitted in any jurisdiction on or after January 1, 1999: $314.00 for the basic membership fee; $15.00 for the Affirmative Action Program fee; and $15.00 for the Client Security Fund assessment; for a total of $344.00.
D. For members admitted in any jurisdiction on or after January 1, 1999 who fail to pay their active fees and assessments of $344.00 by the due date: $386.00.
E. For those members admitted in Oregon in 2001, the fees shall be apportioned. The Client Security Fund assessment of $15.00 shall be paid in full by each new admittee.
F. For those members who pass away in 2001, the fees shall be apportioned upon request of appropriate representatives. The Client Security Fund assessment of $15.00 and the increase of fees due to payment made after the due date shall not be included in the apportioned refund.
G. Exemptions to active member fees:
(1) Members who were admitted to practice law in Oregon prior to January 1, 1951, are exempt from the basic membership fee and the Affirmative Action Program fee. These members are not exempt, based on admittance date, from the Client Security Fund assessment and must pay the Client Security Fund assessment of $15.00.
(2) Members who are on active military duty in compliance with the terms of ORS 408.450 are exempt from the payment of all active membership fees and assessments. Members who are in the VISTA or Peace Corps programs in compliance with Board of Governors Policy 10.302 are exempt from the payment of all active membership fees and assessments. The payment of active membership fees may also be waived if members satisfy the requirements of Board of Governors Policy 10.301 on hardship exemptions.
2. Active Emeritus Members.
A. For members admitted to practice law in any jurisdiction before January 1, 1986, who do not engage at any time in the practice of law except for providing annually a minimum of 40 hours of pro bono legal services to indigent clients referred by Oregon State Bar certified Pro Bono programs: $95.00. The fee includes an allocation of $80.00 for the basic membership fee and $15.00 for the Client Security Fund assessment. A listing of programs available for participation by members in this category shall be maintained by the Executive Director of the Oregon State Bar.
B. For those active emeritus members who fail to pay their active emeritus fees and assessments of $95.00 by the due date: $120.00.
3. Active Retired.
For members admitted to practice law in Oregon prior to January 1, 1961, who do not engage at any time in the practice of law except for pro bono legal services to indigent clients referred by Oregon State Bar certified Pro Bono programs, volunteer service as bar counsel, or as a member of the SPRB or other disciplinary entity, the same fees and assessments as established for active emeritus members in paragraph 2 above.
4. Inactive Members.
A. The 2001 membership fee for inactive members shall be $80.00.
B. For those inactive members who fail to pay their fees of $80.00 by the due date: $105.00 .
C. Exemptions to inactive member fees:
(1) Members who were admitted in Oregon prior to January 1, 1951.
(2) Members in active military duty in compliance with the terms of ORS 408.450 are exempt from the payment of inactive membership fees. Members who are in the VISTA or Peace Corps programs in compliance with Board of Governors Policy 10.302 are exempt from the payment of inactive membership fees. The payment of inactive membership fees may also be waived if members satisfy the requirements of Board of Governors Policy 10.301 on hardship exemptions.
5. Payment Date: All fees and assessments shall be paid simultaneously, in one remittance, not later than the due date or within 60 days of date of admission to the Oregon State Bar, whichever occurs last.
6. Definitions: Apportioned fees pertain only to those members admitted in Oregon or who passed away during calendar year 2001. If the member is admitted or passes away in January, the apportioned fee or refund, as the case may be, shall be 12/12; February shall be 11/12; ...; December shall be 1/12. The calculation shall be rounded up to the nearest dollar for each fee allocation.
Presenter: David A. Hytowitz
8. Supports Ballot Measure 94 – Repeals Measure 11 mandatory minimum sentencing requirements(Delegate Resolution No. 4)
Whereas, Oregon Law has, since the passage in 1994 of Ballot Measure 11 [ORS section 137.700 et. seq.], mandated that juveniles age 15 and older charged with certain offenses be automatically waived into adult court, and
Whereas, Oregon Law has, since the passage in 1994 of Ballot Measure 11 [ORS section 137.700 et. seq.], also required that all persons, juveniles or adults, convicted of these certain offenses, be sentenced to serve lengthy minimum terms of imprisonment upon conviction, without the possibility of early release, and
Whereas, mandatory minimum sentences taking sentencing discretion away from judges, and have shifted the balance of power in the criminal justice system by giving that power to the prosecutors, and
Whereas, the automatic transfer of juveniles from juvenile courts to criminal courts based solely upon the charges filed takes judiciary discretion away from juvenile court judges, and
Whereas, Ballot Measure 94 has been certified to the November, 2000 ballot, and
Whereas, Ballot Measure 94 would repeal Ballot Measure 11 and allow prisoners sentenced in accordance with Ballot Measure 11 to be re-sentenced, and
Whereas, the passage of Ballot Measure 94 would stop the prison expansion in Oregon, and
Whereas, the passage of Ballot Measure 94 would return discretion in sentencing to Oregon judges, and
Whereas, the passage of Ballot Measure 94 would also return discretion over juvenile transfer decisions to Oregon judges, and
Whereas, the passage of Ballot Measure 94 would also restore the balance in the criminal justice system in Oregon,
Resolved, that Ballot Measures 94 should be passed at the polls.
Further resolved, that the Oregon State Bar is instructed to take reasonable steps that will assist the people of the State of Oregon in understanding the impact of these measures by taking the following action:
1. Transmitting the content of this resolution to the editorial boards of the state's major newspapers and broadcast media;
2. Sponsoring neutral educational forums to discuss and debate these measures in various locations around the state prior to the November 2000 election.
Presenter: Susan Elizabeth Reese
9. Amends ORS 9.136-9.152 – OSB House of Delegates (BOG Resolution No. 4)
Resolved, that the OSB House of Delegates approves the following changes to ORS 9.136-9.152 regarding the House of Delegates. If approved, the changes will be introduced in the 2001 legislative session:
1. Term Limits - 9.150 Termination of a delegate’s term.
(2) A delegate to the house of delegates
may not serve more than two consecutive three-year terms or six
consecutive years regardless of the number of terms or portion
of terms the delegate is appointed or elected to serve.
The statute currently places a limit on the terms that an elected delegate can serve. The Board of Governors recommends that the current restriction be deleted from the statute. Elected delegates have indicated that they would like to run for more than two terms. Because fewer members are running for elected positions, the BOG believes that it is in the best interest of the HOD to have active members continue to serve the body.
2. Committee Chairs as Ex Officio Delegates - 9.136 House of delegates created; membership; terms.
(3) The chairperson of each Oregon State Bar
committee and section is an ex officio voting
(8) An elected delegate may not serve as a member
of the board of governors, as a
section chairperson or as a county bar association president during
the delegate’s term.
9.150(1) Termination of delegate’s term.
(1) The term of service of any delegate shall end upon the death or resignation of the delegate. If the delegate is an attorney delegate, the term of service shall end on the date that the delegate:
(c) Takes office as a member of the board of
governors, as a chairperson of a state bar
or section, or as a county bar association president;
The BOG’s Policy & Governance Committee discussed at length the role that committee chairs play in the House of Delegates. While the BOG believes that committee chairs enhance the diversity in the HOD because of the BOG’s commitment to diversity in committee appointments, it also recognizes that committees are an extension of the Board of Governors and therefore, should not serve an independent role in the HOD. The BOG recommends eliminating committee chairs as ex officio delegates.
3. Filling Vacancies - 9.136 House of delegates created; membership; terms.
(7) Elected delegates shall serve for terms
of three years. A vacancy in the office of an elected delegate
that occurs more than 18 months before the expiration
of the term shall be filled for the remainder of the term by a
delegate elected at a special election. The election shall be
held as soon as possible after the vacancy occurs. The vacancy
may be filled, for the period between the occurrence of the vacancy
and the special election, by a delegate appointed by the board
of governors. A vacancy in the office of an elected delegate that
occurs 18 months or less before the expiration of the term
shall be filled for the remainder of the term by a delegate appointed
by the board of governors.
As in past years, the 2000 HOD election resulted in an insufficient number of candidates to fill existing vacancies, specifically:
Region 1 1 candidate for 2 positions
Region 4 0 candidates for 6 positions
Region 5 12 candidates for 19 positions
Region 6 3 candidates for 6 positions
Out-of-State 0 candidates for 11 positions
ORS 9.136(7) requires that a vacancy occurring more than 18 months before the expiration of the term be filled by a special election. If the vacancy occurs with 18 months or less in the delegate’s term, it is filled by a BOG appointment. To reduce the need for numerous special elections, the board has opted in recent years to appoint delegates to a one-year term as vacancies have arisen. Special elections are costly and interested candidates are few. The BOG recommends that all vacancies be filled by appointment.
4. Public Members - 9.145 Public Members
The board of governors shall appoint a public member
delegate for each region established by ORS 9.025.
delegates of each of those regions shall, by majority vote, nominate
five candidates for the position of public member delegate for the district.
The nominations must be submitted to the board by June 15 of every third
year, beginning in 1996. The board shall select
appoint a one of the candidates as the public
member delegate for the each region prior
to the annual April election. The selection must be made
by August 1 of the year the nominations are made. A public
member delegate shall serve a three-year term beginning on the third
Tuesday of April in the year of appointment. A vacant public member
delegate position shall be filled for the remainder of the term by a
delegate appointed by the board of governors.
ORS 9.145 requires that public member nominations be submitted by each in-state region by June 1. Since the HOD was instituted, only a handful of resumes have been received for public member positions. Last year, public members that were already serving the bar in some capacity (fee arbitration panel, Disciplinary Board, LPRC, etc.) were encouraged to consider serving as a HOD public member. Only a few were interested. In addition, nominations by the regional delegates has proved cumbersome and ineffective.
The second change regarding public members is the date that the public member assumes office (currently August 1). Although the Bar Act is not clear as to when elected delegates take office, the bar has used the day after the election date as the official beginning of terms. Elected delegates thus assume office on the day after the election, which is held on the third Monday in April. This allows delegates adequate time to become familiar with their responsibilities and to study issues that will be before the HOD. The BOG recommends that the public member delegates take office at the same time as the elected delegates.
5. Out-of-State Delegates - 9.152 Election of Delegates
The election of delegates to the house of delegates shall be held on the third Monday of April each year. Nominations shall be made by petition signed by at least 10 members of the Oregon State Bar entitled to vote for a delegate in the election, except that candidates for out-of-state delegates are not required to obtain signatures for nomination. The election shall be by ballot. Nominating petitions must be filed with the executive director of the state bar at least 30 days before the election. The executive director shall mail ballots containing the nominations for the office of delegate in each region to every active member in the region. The ballots must be mailed on or before April 1 of the year of the election. Ballots may be delivered in person or by mail to the executive director, but must be received by the executive director on or before the day of the election. The executive director, with any assistants that the executive director may designate, shall canvass the votes and record the results of the election. The candidate, or candidates if there is more than one open position, receiving the highest number of votes in each region for the position or positions being filled shall be declared elected. Balloting shall be conducted in a manner that ensures that only active members of the bar can vote and that the secrecy of the ballots shall be preserved.
In the 2000 HOD election, there were no candidates for the out-of-state delegate positions. It has proved difficult for out-of-state Oregon attorneys to locate other out-of-state members and obtain the required 10 signatures on their nominating petitions. The BOG recommends that the 10-signature requirement for nominating petitions for out-of-state delegates be eliminated.
6. Housekeeping Amendment - ORS 9.136 House of Delegates created; membership; terms.
Note: Section 20, chapter 302, Oregon Laws
Sec 20. Notwithstanding section 7 of the Act [9.136], delegates elected to the house of delegates in the first election shall serve terms determined as follows:
(1) The executive director of the Oregon State Bar shall make a list of the delegates elected for each region in the first election. The list shall begin with the delegate for the region who received the most votes. The other delegates from the region shall be listed in descending order, based on the number of votes received.
(2) The executive director of the Oregon State Bar shall divide the list prepared under this section for each region as closely as possible into three equal groups. The first and second groups shall be of equal size. The third group may be larger or smaller. The first group of delegates, containing the delegates who received the most votes, shall serve a term of three years. The second group of delegates, containing the delegates who received the next highest number of votes, shall serve a term of two years. The third group of delegates, containing the delegates who received the lowest number of votes, shall serve a term of one year. [1995 c.302 §20]
If statutory changes are proposed, eliminate 'Note: Section 20, chapter 302, Oregon Laws 1995' that details how delegates were elected at the first HOD election.
Presenter: John J. Tyner III
10. In Memoriam (BOG Resolution No. 2)
Resolved, that the OSB House of Delegates and members assembled stand for a moment of silence in honor of the members of the Oregon State Bar whose deaths have been reported to the Bar since the 1999 House of Delegates Meeting.
James H. Anderson, Waldport
Adolf A. Asher , Portland
Darst B. Atherly, Eugene
James E. Auxier , Aurora
Hon Robert C Belloni, San Mateo, California
John W. Brugman, Portland
John T. Chinnock, Woodburn
Walter J. Cosgrave, Portland
Frank J. Coumont, Gearhart
Douglas R. Courson, Portland
Howard M. Dupuy, Portland
Hon Thomas E Edison, Cannon Beach
Dean Ellis, Salem
George L. Evans , Portland
David R. Fortier, Brookings
Otto J. Frohnmayer, Medford
George E. Heilig, Portland
Glen Hieber, Hillsboro
Wayne Hilliard, Portland
Orlando J. Hollis, Eugene
William M. Holmes, Bend
William L. Jackson, Baker City
Stanley C. Jones, Klamath Falls
David A. Kekel, Portland
John H. Kottkamp, Pendleton
G. Kenneth Litchfield, Newport
John A. Lorentz, Phoenix, Arizona
A Keith Martin, Eugene
William A. Martin , Portland
Michael F. McClain , Albany
Donald W. McEwen, Portland
James M. McGinty, Myrtle Creek
Lynne McNutt, Coos Bay
Laurence Morley , Lebanon
Donald G. Morrison, Lincoln City
Hon John J. Murchison, Portland
T. Leonard O'Byrne, Portland
Hon Kenneth J. O'Connell, Salem
Diane Crowell Powrie, Bend
Ernest M. Robertson , Dallas, Texas
Renee J. Schmeling, Pendleton
Leonard S. Shoen, Las Vegas, Nevada
Sol Siegel, Portland
F. Leo Smith, Portland
Carl G. Stanley, Albany
David C. Swart, Portland
LaVorn A. Taylor, Vancouver
Sidney E. Thwing, Eugene
Mary J. Vershum, Portland
Hon William W. Wells, Pendleton
Presenter: Lawrence B. Rew
11. Amends DR 5-106 and DR 5-105(G) - Mediation (BOG Resolution No. 3)
Resolved, that Disciplinary Rules 5-106 and 5-105(G) be amended to read as follows:
DR 5-106 Mediation
(A) A lawyer serving [may act] as a mediator:
(1) shall not act as a lawyer for any party against another party in the matter in mediation or in any related proceeding, and
(2) [for multiple parties in any matter if the lawyer] must clearly inform[s] the parties of and obtain the parties’ consent to the lawyer’s role as mediator [and they consent to this arrangement].
(B) A lawyer serving as a mediator:
(1) may [draft, and may file in court, a settlement agreement, including a stipulated order or judgment] prepare documents that memorialize and [to] implement the [settlement] agreement reached in mediation,
(2) [but must advise and encourage the parties to] shall recommend that each party seek independent legal advice before executing [it] the documents, and
(3) with the consent of all parties, may record or may file the documents in court.
[(C) A lawyer serving as a mediator may not represent one party against the other in the matter in mediation or in any related legal proceeding.]
(C) Notwithstanding DR 5-105(G), when a lawyer is serving or has served as a mediator in a matter, a member of the lawyer’s firm may accept or continue the representation of a party in the matter in mediation or in a related matter if all parties to the mediation consent after full disclosure.
[(D) A lawyer shall withdraw as mediator if any of the parties so request, or if any of the conditions stated in DR 5-106(A) are no longer satisfied. Upon withdrawal, the lawyer shall not continue to act on behalf of any of the parties in the matter that was the subject of the mediation.]
(D) The requirements of (A)(2) and (B)(2) shall not apply to mediation programs established by operation of law or court order.
DR 5-105(G) Vicarious Disqualification of Affiliates
Except as permitted in subsections (D) and (F), when a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule other than DR 2-110(B)(3), DR 5-101(A)(2), DR 5-102(A), DR 5-106(A)(1) or DR 5-110, no other member of the lawyer’s firm may accept or continue such employment.
DR 5-106 was adopted in 1986 to eliminate concerns that a lawyer acting as a mediator was engaged in an improper conflict of interest situation. As expressed in OSB Formal Ethics Op. No. 1991-101, this is because the lawyer-mediator does not, 'technically speaking,' represent any of the parties to the mediation. On the other hand, OSB Formal Ethics Op. No. 1991-101 indicated that drafting a settlement agreement for the mediating parties was the practice of law.
Over the years, questions arose about the extent to which lawyer-mediators could draft other documents to facilitate or implement the agreement reached in mediation (for instance, a petition and decree in a dissolution proceeding, or an easement in a real property dispute). In 1998, the Supreme Court adopted HOD-approved amendments to DR 5-106 to clarify that lawyer-mediators could draft 'a stipulated order or judgment to implement the settlement agreement' and file it in court after advising the parties to seek independent legal advice concerning the agreement.
Subsequently, questions arose about possible unintended consequences of the 1998 amendments including (1) whether the rule now allows lawyer-mediators to represent the conflicting interests of the parties to the mediation, (2) to what extent lawyer-mediators could draft legal documents for the parties, and (3) whether the lawyer-mediator was practicing law when drafting documents and if so, on whose behalf?
To address these concerns, further amendments to DR 5-106 were proposed, with input from OSB General Counsel’s Office, the PLF, the ADR Section Executive Committee and the Legal Ethics Committee. At the 1999 HOD Meeting, the amendments were voted down after lively debate about whether they were indeed improvements to the rule or would merely create more confusion and impose unnecessary burdens on lawyer-mediators. Following the 1999 HOD Meeting, the Board of Governors appointed a Study Group to review the rule in response to the concerns expressed at the HOD debate and to recommend a proposal for submission to the HOD in 2000.
The foregoing is the product of the Study Group and has the support of the ADR Section Executive Committee and the Legal Ethics Committee. One obvious change is in subsection (A), where the proposed new language recognizes that mediation is a permissible activity for a lawyer. The limitation on the lawyer-mediator’s role is placed at the beginning of the rule to highlight the importance of the fact that the lawyer-mediator is not and cannot be an advocate or partisan representative of a party in the mediation or in related matters. Subsection (A)(2) continues the requirement that the lawyer explain and that the parties consent to the lawyer’s role as mediator.
Subsection (B) amplifies the 1998 amendments to permit the lawyer-mediator to prepare any documents necessary to 'memorialize and implement' the agreement of the parties. It also continues the requirement that the lawyer recommend that the parties seek independent legal advice before signing documents prepared by the lawyer-mediator. Subsection (B)(3) allows the lawyer-mediator to 'record' documents as well as file them in court, taking into consideration all the various kinds of matters that get mediated. However, recording or filing is allowed only with the consent of all parties to avoid the appearance that the lawyer-mediator is acting on behalf of one party rather than on behalf of all parties.
Subsection (C) provides that the 'firm unit' (DR 5-105(G)) does not apply to mediations conducted pursuant to DR 5-106 and, with the consent of the parties, allows another lawyer in the mediator’s firm to represent a party in the mediation. To ensure consistency in the rules, it is also proposed that DR 5-105(G) be amended to except DR 5-106 from the rule.
Presenter: Hon. Kristena LaMar
12. Proposed study of Multidisciplinary Practice issue (MDP) (BOG Resolution No. 5)
Resolved, that the OSB House of Delegates approves that the OSB develop its disciplinary rules to permit lawyers to share fees and join with non-lawyer professionals to deliver to clients both legal and non-legal professional services (MDP), provided that lawyers have control and authority to assure that all other existing core values of the legal profession for the protection of clients are maintained, including competence, independence of professional judgment, protection of confidential client information, loyalty to the client through avoidance of conflicts of interest, and pro bono publico obligations; and that all non-lawyer professionals and employees are held to the same ethical requirements as the lawyer they are working with. If this resolution passes, specific DR changes will be developed after consultation with OSB General Counsel, Disciplinary Counsel, the OSB Ethics Committee, and the Disciplinary Rules and Procedures Committee at the 2001 HOD meeting. Any disciplinary rule changes on MDP must ultimately be approved by the Oregon Supreme Court before going into effect.
The bar's Strategic Planning Committee studied the issue of multidisciplinary practice this past year. It came to the conclusion that each state bar has to decide for itself whether to authorize multidisciplinary practices and under what conditions and restrictions.
The American Bar Association House of Delegates, at its meeting on July 10-11, 2000 in New York City, approved the following resolution:
RESOLVED, that each jurisdiction is urged to revise its law governing lawyers to implement the following principles and preserve the core values of the legal profession:
1. It is in the public interest to preserve the core values of the legal profession, among which are:
a. the lawyer's duty of undivided loyalty to the client;
b. the lawyer's duty competently to exercise independent legal judgment for the benefit of the client;
c. the lawyer's duty to hold client confidences inviolate;
d. the lawyer's duty to avoid conflicts of interest with the client;
e. the lawyer's duty to help maintain a single profession of law with responsibilities as a representative of clients, an officer of the legal system, and a public citizen having special responsibility for the quality of justice; and
f. The lawyer's duty to promote access to justice.
2. All lawyers are members of one profession subject in each jurisdiction to the law governing lawyers.
3. The law governing lawyers was developed to protect the public interest and to preserve the core values of the legal profession, that are essential to the proper functioning of the American justice system.
4. State bar associations and other entities charged with attorney discipline should reaffirm their commitment to enforcing vigorously their respective law governing lawyers.
5. Each jurisdiction should reevaluate and refine to the extent necessary the definition of the 'practice of law.'
6. Jurisdictions should retain and enforce laws that generally bar the practice of law by entities other than law firms.
7. The sharing of legal fees with non-lawyers and the ownership and control of the practice of law by non-lawyers are inconsistent with the core values of the legal profession.
8. The law governing lawyers, that prohibits lawyers from sharing legal fees with non-lawyers and from directly or indirectly transferring to non-lawyers ownership or control over entities practicing law, should not be revised.
FURTHER RESOLVED that the Standing Committee on Ethics and Professional Responsibility of the American Bar Association shall, in consultation with state, local and territorial bar associations and interested ABA sections, divisions, and committees undertake a review of the Model Rules of Professional Conduct ('MRPC') and shall recommend to the House of Delegates such amendments to the MRPC as are necessary to assure that there are safeguards in the MRPC relating to strategic alliances and other contractual relationships with nonlegal professional service providers consistent with the statement of principles in this Resolution.
FURTHER RESOLVED that the American Bar Association recommends that in jurisdictions that permit lawyers and law firms to own and operate nonlegal businesses, no non-lawyer or nonlegal entity involved in the provision of such services should own or control the practice of law by a lawyer or law firm or otherwise be permitted to direct or regulate the professional judgment of the lawyer or law firm in rendering legal services to any person.
FURTHER RESOLVED that the Commission on Multidisciplinary Practice be discharged with the Association's gratitude for the Commission's hard work and with commendation for its substantial contributions to the profession.
As can be seen, the ABA has adopted a resolution that restricts the potential scope of multidisciplinary practices between lawyers and non-lawyers, consistent with the core privileges set forth in the resolution. The Board of Governors, upon the recommendation of the Strategic Planning Committee, proposes that the OSB House of Delegates discuss the development of specific disciplinary rules authorizing MDPs with non-lawyers in Oregon, consistent with core principles quite similar to those approved by the ABA. If the board's resolution is not approved by the OSB House of Delegates, existing restrictions prohibiting MDPs will remain in place in Oregon. The Board of Governors’ Resolution is essentially a request of the House to decide whether, and if so, to what extent, MDPs shall be permitted in this state.
Presenter: Edwin A. Harnden
13. Opposes Initiative Measure 8 (Limits state appropriations to percent of prior state personal income) and Initiative Measure 91 (Full deductibility of federal income taxes on state income taxes) (BOG Resolution No. 6)
Whereas, the Oregon State Bar has traditionally supported measures to improve the administration of justice in Oregon such as reasonable compensation for public defenders, appointment of additional judges, fair pay for judges, increased court support staff, adequate and safe court facilities, the availability of legal services for the poor, and a fair, efficient and adequately funded public safety and criminal justice system; and
Whereas, the resources of state and local governments have not been sufficient to adequately fund these Bar priorities in the past; and
Whereas, Initiative Measure 8 limiting state appropriations to a percent of prior state personal income would almost certainly force a long-term cut of at least 20 percent in the Judicial Department budget; and
Whereas, Initiative Measure 91 making federal income taxes fully deductible on Oregon state tax returns would almost certainly cause an immediate cut of at least 24 percent in the funding of the Judicial Department and a long-term cut of 18 percent from present levels; and
Whereas, passage of either Initiative Measure 8 or 91 would decimate past improvements to the administration of justice in this state and make any further improvements virtually impossible,
1. The Oregon State Bar opposes enactment of both Initiative Measure 8 and Initiative Measure 91; and
2. All members of the Oregon State Bar are urged to communicate to their clients, family, staff members, and others the gross unfairness Initiative Measure 8 and 91 would inflict on all Oregonians by crippling the administration of justice and access to justice in this state.
Presenter: David M. Orf
The Board of Governors believes Initiative Measures 8 and 91 would have crippling effects on the administration of justice and access to justice in Oregon if approved by the electorate in November, 2000. Approval of the proposed resolution would put the Oregon State Bar on record as opposed to these two measures based on their adverse effects on Oregon's justice and court systems if enacted into law.
14. Proposes to reestablish annual OSB convention (BOG Resolution No. 7)
Whereas, the House of Delegates passed a resolution in 1999 creating a committee to study the reinstatement of the annual meeting on a cost-effective basis; and
Whereas, Oregon State Bar president Larry Rew appointed a committee which has reported to the Board of Governors recommending reinstating the convention in even numbered years commencing in 2002 (in addition to the convention already held in odd numbered years); and
Whereas, the Board of Governors has adopted the report and its recommendation creating a two-day convention in even numbered years in conjunction with the House of Delegates meeting:
1. The House of Delegates endorse the decision of the Board of Governors to create a two day convention in even numbered years in conjunction with the House of Delegates meeting; and
2. The Board of Governors adopt reasonable specific measurable outcomes for this event including what constitutes a 'cost-effective' meeting and communicate these outcomes to the House of Delegates; and
3. The two-day convention in even numbered years be continued if the reasonable outcomes specified by the Board of Governors are met or exceeded.
The Annual Meeting Study Group’s report has been distributed to the House of Delegates. The Board of Governors, upon the recommendation of the Annual Meeting Study Group, recommends the House of Delegates approve the preceding resolution which would reinstate an OSB annual meeting each year in conjunction with the annual OSB House of Delegates Meeting. A committee would also be appointed to assist in ensuring the 2002 annual meeting was successful and to monitor whether an OSB annual meeting can be financially viable on an ongoing basis.
Presenter: Charles R. Williamson III
15. Amends DR 1-103(E)(2) – Disclosure of Information to Authorities (BOG Resolution No. 8)
Resolved, that Disciplinary Rule 1-103(E)(2) be amended to read as follows:
(E) The provisions of DR 1-103(A) [duty to report disciplinary rule violations]shall not apply to lawyers who obtain such knowledge or evidence while:
(1) Acting as a member, investigator, agent, employee or as a designee of the State Lawyers Assistance Committee; or
(2) Acting as a board member, employee, investigator, agent or lawyer for or on behalf of the Professional Liability Fund, or as a Board of Governors liaison to the Professional Liability Fund; or
(3) Participating in the loss prevention programs of the Professional Liability Fund, including the Oregon Attorney Assistance Program.
The Board of Governors and PLF Board of Directors agreed on a number of improvements in the oversight, governance and operation of the Professional Liability Fund on June 30, 2000. Among other things, the two boards increased the number of liaisons between the two boards to three each and created a special issues committee comprised of three members of each board to review potentially controversial PLF claims defense strategies. The Board of Governors liaisons will also serve as the board’s representatives on this committee.
In light of the foregoing changes and as the lawyer members of the PLF Board are currently exempted from the duty to report disciplinary rule violations under DR 1-103(E)(2), the Board of Governors is requesting its lawyer member liaisons to the PLF be granted a similar exception.
Presenter: Sarah K. Rinehart
16. Proposed election to HOD of chief delegate and regional delegates (Delegate Resolution No. 1)
Resolved, that the Oregon State Bar House of Delegates Rules of Procedure are amended as follows:
Add Rule 5.8: As the last item of business of the annual meeting of the House of Delegates, an elected delegate shall be chosen by vote to be Chief Delegate of the House of Delegates for the following year. The duties of the Chief Delegate shall include planning and coordination of interim meetings of Regional Delegates and assuring the orderly, deliberative process of the House.
Add Rule 5.9: Within sixty days of the annual meeting, upon convening by the local governor, the delegates from each region shall elect a Regional Delegate. The first Regional Delegate shall be elected at a meeting called for that purpose by the local OSB governor. Thereafter the Regional Delegate is responsible for calling meetings of the regional delegation and attending interim meetings of the Regional Delegates of the House of Delegates.
Add Rule 5.10: The Chief Delegate and Regional Delegates shall meet between each annual meeting of the House. One meeting shall be with the Board of Governors to review action taken on the issues decided at preceding annual or special meetings and one meeting shall be with the Board of Governors to discuss agenda issues for upcoming meetings of the House of Delegates. The Chief Delegate may convene additional meetings of the Regional Delegates at his or her discretion. The President shall invite the Chief Justice to interim meetings of the Chief and Regional Delegates of the House of Delegates and the Board of Governors.
Further resolved, that notwithstanding proposed new Rule 5.8 and existing Rule 10.1, these rules shall go into effect immediately upon adoption and that the next order of business for this meeting of the House of Delegates shall be the election of the chief delegate who shall be elected by majority vote by written ballot following the receipt of nominations for such position from the floor.
This Resolution was presented to the 1998 House of Delegates and received a majority vote. Rule 10 of the House of Delegates at that time required a two-thirds vote for passage. Rule 10 was amended in 1999 to require only a majority vote.
The Oregon State Bar House of Delegates has now been in existence for five years without any structure beyond its annual meeting. This resolution provides for some minimal interim opportunity for discourse with the Board of Governors. This resolution will lead to the increased dissemination of Bar information to the members.
The staffing of these proposed changes will have an insignificant fiscal impact.
Chief Justice Carson has indicated that he will accept the invitation to attend meetings between the House of Delegates Regional Delegates and the Board of Governors.
Presenters: Mike Phillips and Ross Shepard
17. Proposed future House of Delegates role concerning operation of the PLF (Delegate Resolution No. 2)
Whereas, the HOD desires to establish a role with respect to fundamental organization and policy issues concerning the operation of the Professional Liability Fund (the 'Fund');
Whereas, pursuant to policy decisions of the Board of Governors (BOG), the Fund has, since its inception in 1978, been administered by a Board of Directors (BOD) having separate authority to administer and manage operation of the Fund, including exclusive staff oversight (OSB Bylaw Article 15.4 and BOG Policy 14.200), but subject to the BOG’s retained authority to appoint and remove BOD members, and to approve the Fund’s annual assessment, coverage plan, budget, policies and bylaws;
Whereas, from time to time there have been proposals to fundamentally change the level of independence of the Fund’s administration, or the BOG’s retained authority;
Whereas, this past year, in response to criticism of a PLF claims defense strategy, such proposals were considered and rejected to change fundamentally the administration of the Fund. Instead, through joint and cooperative efforts, the BOG and BOD adopted improvements, in June, to PLF policies and practices, as well as enhancements to their respective roles;
Whereas, in the future, the HOD wishes to perform its duties under OSB Bylaw Article 8.1 to serve as the forum for State Bar membership 'to debate and decide matters of policy relating to the membership or the administration of justice,' before such decisions are made, or take effect, which would fundamentally change the current level of independence of the PLF administration, or the current level of the BOG’s retained authority regarding the PLF. Significant policy issues may exist in considering:
a. Confidentiality for attorneys who self-report potential practice errors subject to cure or who voluntarily request and accept the personal or practice management assistance they need;
b. Attorney/client confidentiality and work product privilege in the Fund’s claim-handling, defense and 'repair' functions and separation from Bar functions subject to public records laws;
c. The specialized nature of PLF 'insurer' responsibilities, the expertise required to manage such program, and benefits of focused administration;
d. Leadership and financial stability, clarity of accountability for decision making and assessment monies, and maintaining the confidence of the reinsurance market; Now Therefore, Be It
(1) The HOD commends the members of the American College of Trial Lawyers who served on the PLF Policies and Procedures Task Force (Payton Smith, Chair, Paul Fortino, Don Marmaduke, Ted Runstein, and Martha Walters), the OSB BOG and PLF BOD members who served on the Joint OSB/PLF Governance Task Force, as well as the entire BOG and BOD for their dedicated service, diligent review, and contributions to the cooperative and joint resolution of issues in June, 2000;
(2) In the future, in the absence of joint agreement between the BOG and BOD, no action to fundamentally change the current level of independence of the PLF administration or the current level of BOG retained authority as to the PLF shall be taken or become effective until such changes are presented to the HOD for the purpose of:
(a) providing the forum for Oregon State Bar membership to debate whether such change is warranted or creates additional policy concerns, and
(b) making the policy decisions underlying such change;
(3) In furtherance of such role under OSB Bylaw Article 8.1, the BOG and the BOD should fully apprise the HOD of any issue triggering consideration of a fundamental change in the level of independence of PLF administration or the BOG’s retained authority over the PLF, as well as their positions, sufficiently in advance of the scheduled HOD debate, so that meaningful and well-informed decisions can be made.
The purpose of this resolution is to establish a future role for the HOD before fundamental changes in the current level of independence of the PLF can be made. There are no proposed changes to be considered under this resolution, as of its submission. The current level of PLF independence is reflected in OSB Bylaw Article 15.4 which provides that the '…Board of Directors of the PLF shall have sole and exclusive authority and responsibility to operate and manage all aspects of the PLF,' subject to change by the BOG. In addition, BOG Policy 14.200 further sets forth a separation of management, as between the respective staffs of both.
This past year the BOG and the PLF Board (BOD) began independent, internal and joint reviews of PLF policies and practices and organizational structure in response to concerns about a rarely used 'judgment acquisition strategy,' for gaining control of a malpractice claim and then dismissing it. The PLF, through its CEO, made an administrative decision to not use this strategy again. In addition, in June, the reviews led to joint decisions by both the BOG and BOD including to require committee approval prior to use of any potentially controversial strategy and PLF compliance with claims handling principles consistent with the Insurance Code (previously voluntary done); increased interaction between the BOG and BOD and their staffs through periodic meetings, review sessions, and formal liaisons; and some reciprocal Board member involvement in annual performance reviews of the other’s Executive Director. The purpose of this resolution is not to ask the HOD to review the merits of those joint decisions. It is to express HOD support for joint resolution by the BOG and BOD, and to commend all those who contributed to the mutually acceptable solutions.
During this process several fundamental changes in PLF administration were considered and rejected. However, had they received a majority vote of the BOG (8 or 9 votes) they would likely have been reported as decisions to the HOD, without State Bar debate or input beyond the BOG. The HOD had not previously requested to be involved. Such proposed changes included the OSB Executive Director managing the PLF staff and reporting on PLF operations directly to the BOG; and in the alternative, the BOG assuming responsibility for hiring and firing the PLF CEO. The purpose of this resolution is to establish a future role and process for the HOD to exercise its responsibilities to attorneys and the public under OSB Bylaw Article 8.1, specifically its State Bar debate and policy decision responsibilities, before these types of fundamental changes can be made.
Presenter: Trina E. Laidlaw
18. Amends DR 5-103(B) – Recovery of Costs from Clients (Delegate Resolution No. 3)
Whereas, the current Disciplinary Rule 5-103 prohibits forgiveness of costs advanced to a client when a contingent-fee case is unsuccessful, thereby limiting access to the legal system for economically disadvantaged litigants; Now Therefore, Be It
Resolved, that the Oregon State Bar House of Delegates approves the following disciplinary rule change for submission to the Oregon Supreme Court:
Disciplinary Rule 5 - Conflicts of Interest and Mediation
* * *
DR 5-103 Avoiding Acquisition of Interest in Litigation
(A) A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except the lawyer may:
(1) Acquire a lien to secure payment of fees or expenses due or to become due.
(2) Contract with a client for a reasonable contingent fee in a civil case, subject to the limitations imposed by DR 2-106.
(B) While representing a client in connection with
contemplated or pending litigation, a lawyer shall not advance or
guarantee financial assistance to the lawyer’s client, except that:
a lawyer may advance or guarantee the expenses of litigation,
provided the client remains ultimately liable for such expenses
to the extent of the client’s ability to pay.
(1) a lawyer may advance reasonable court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and
(2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client;
(3) however, a lawyer shall not encourage public knowledge of any such payments or advancements to promote the lawyer’s employment by any client.
The proposed amendment is based upon the ABA’s Model Rules of Professional Conduct 1.8(e) which allows the repayment of costs, like fees, to be contingent.
Contingent fee arrangements often 'provide the only practical means by which one having a claim against another can economically afford, finance, and obtain the services of a competent lawyer to prosecute a claim, and a successful prosecution of the claim produces a fund out of which the fee can be paid.' The Lawyer’s Code of Professional Responsibility, 66 PLI/NY 7, 19 (December 1999).
The rules against lawyers’ providing financial assistance are based on the doctrines of maintenance and champerty. 'A champertous agreement is one in which a person lacking an interest in another’s litigation finances the suit for personal gain. Champerty is officious intermeddling in litigation in which one has no interest by assisting its prosecution with the intent to derive compensation from the proceeds of the suit.' Dissent, State Ex Rel Okl. Bar Ass’n v. Smolen, 1992 OK 116, 837 P.2d 894 (1992)(attorney gets public censure for loaning client living expenses). The prohibition against financial assistance was to 'prevent the churning up of litigation, the clogging of the courts, and to protect the people.' Id.
Rule 11 is in place to combat frivolous claims and, in any contingent case, the lawyer already has a financial stake in the outcome, which would not be affected by being able to forgive advanced expenses if the case is unsuccessful.
The risk that the wealthiest firms will get all the clients is slim, because the firm cannot advance anything beyond reasonable court costs. Unlike rules in other states, this draft does not include an option to advance or loan living expenses.
Instead of protecting the client from opportunists, the current disciplinary rule prevents economically disadvantaged clients from pursuing resolution in the legal system. These clients have to agree to go into debt if the case is unsuccessful, and that economic risk prevents legitimate claims from being pursued.
Under the current rule the client remains liable for the costs and, thus, the lawyer is required to pursue the unsuccessful client for recovery of costs and expenses advanced, or face punishment for violation of an ethical rule.
The current provisions of DR 5-103 do not acknowledge the reality that already exists and must exist to allow people with limited resources to have access to the legal system.
Financial Impact/Tax Implications
The proposed amendment would not have any financial impact upon the Oregon State Bar. However, it may affect the tax burden of Oregon’s lawyers by allowing the deduction of those costs as business expenses, pursuant to 26 U.S.C. §§ 161, 162.
Lawyers’ reimbursable costs are not deductible and the expectation of reimbursement likens such advances to loans. Canelo v. Commissioner, 447 F.2d 484, 485 (9th Cir. 1971). In Boccardo v. United States, 12 Cl.Ct. 184, 188 (1987), when the client is required to reimburse the attorney for cost advances made under a contingent fee contract, the advances were in the nature of loans and could not be deducted as business expenses.
In one case the district court denied a deduction for litigation expenses advanced by the lawyer under a net fee contract because, under the state bar code of responsibility, the lawyer had a right to be reimbursed by the client, regardless of the outcome of the litigation. Milan, Miller, Berger, Brody and Miller v. U.S., 679 F.Supp. 692, 61 A.F.T.R.2d 88-695, 88-1 USTC P 9209 (1988, DC MI).
In 1995, the Ninth Circuit, in Boccardo v. C.I.R., 56 F.3d 1016, decided that such advances to clients for litigation costs were deductible when the fee agreement is a gross fee contract and 'there is no obligation on the part of the client to repay the money expended.' Id. at 1018.
In 1999, the United States Tax Court held that litigation costs paid on behalf of clients and then reimbursed are nondeductible loans rather than business expenses where the repayment was not contingent upon the outcome of the underlying case. Pelton & Gunther v. C.I.R., 1999 WL 801399 (U.S.Tax Ct.), 78 T.C.M. (CCH) 578, T.C.M. (RIA) 99, 339 (Oct. 8, 1999).
The amendment follows the ABA’s Model Rule that allows repayment to be contingent upon the outcome of the case.
The amendment allows clients with limited resources access to Oregon’s legal system.
The amendment permits lawyers to forgive costs if there is no recovery in the client’s case.
The amendment does not affect lawyers’ loyalty any more than the existence of contingent fees.
The correct ethical rule would be to allow attorneys to pay these costs for the client without any expectation of reimbursement other than the potential recovery in the client’s case itself.
Presenter: Bruno J. Jagelski