THE COURTS
Title 204--JUDICIAL SYSTEM GENERAL PROVISIONS
PART V. PROFESSIONAL ETHICS AND CONDUCT
[ 204 PA. CODE CH. 83 ]
Notice of Proposed Amendments to the Pennsylvania Rules of Disciplinary Enforcement Relating to the Conservators for Interests of Clients
[38 Pa.B. 4504]
[Saturday, August 16, 2008]The Disciplinary Board of the Supreme Court (Board) of Pennsylvania is considering recommending to The Supreme Court of Pennsylvania that it amend the Pennsylvania Rules of Disciplinary Enforcement, as set forth in Annex A, to make a number of changes in the rules relating to conservators appointed to protect the interests of clients of absent attorneys.
The proposed amendments reflect the experience of the Board with conservatorships under existing Rules 321, 322, 324, 325 and 328 of the Pennsylvania Rules of Disciplinary Enforcement over the past several years. Among the important changes being proposed are the following:
1. A provision would be added to provide that in cases where the Office of Disciplinary Counsel serves as a conservator, that office still has the authority to investigate and/or prosecute possible misconduct based on evidence obtained during its service as conservator.
2. Under the current rules, the presumption is that conservators will serve without compensation. In cases where nondisciplinary counsel conservators are appointed, the Board is proposing that they be compensated under a written agreement with the Office of Disciplinary Counsel at an hourly rate identical to that received by court-appointed counsel at the noncourt appearance rate in the judicial district where the conservator was appointed.
3. Pa.R.D.E. 321(a) would be amended to require the written concurrence of disciplinary counsel when applications to appoint conservators are filed by any other interested person. This provision would ensure that no attorney will be appointed as conservator until any compensation issues are resolved to Office of Disciplinary Counsel's satisfaction.
4. New Pa.R.D.E. 322(c) would require that the conservator make reasonable effort to identify and send written notice to all clients of the absent attorney whose files were opened within 5 years of the appointment, regardless of whether the case is active or not, and shall also identify and send written notice to all clients whose cases are active, regardless of the age of the file. All clients whose files are identified as both inactive and older than 5 years shall be given notice of the appointment of a conservator by publication of a notice all aspects of which are to be approved by the appointing court.
Interested persons are invited to submit written comments regarding the proposed amendments to the Office of the Secretary, The Disciplinary Board of the Supreme Court of Pennsylvania, First Floor, Two Lemoyne Drive, Lemoyne, PA 17043, on or before September 8, 2008.
ELAINE M. BIXLER,
Secretary
Disciplinary Board of the
Supreme Court of Pennsylvania
Annex A
TITLE 204. JUDICIAL SYSTEM GENERAL PROVISIONS
PART V. PROFESSIONAL ETHICS AND CONDUCT
Subpart B. DISCIPLINARY ENFORCEMENT
CHAPTER 83. PENNSYLVANIA RULES OF DISCIPLINARY ENFORCEMENT
Subchapter C. DISABILITY AND RELATED MATTERS Rule 321. Appointment of conservator to protect interests of clients of absent attorney.
(a) Upon application of Disciplinary Counsel, or any other interested person with the written concurrence of Disciplinary Counsel, the president judge of a court of common pleas shall have the power to appoint one or more eligible persons to act as conservators of the affairs of an attorney or formerly admitted attorney if:
(1) the attorney maintains or has maintained an office for the practice of law within the judicial district; and
(2) [(Reserved).] any of the following applies:
(i) the attorney is made the subject of an order under Enforcement Rule 208(f) (relating to emergency interim suspension orders and related matters); or
(ii) the president judge of the court of common pleas pursuant to Enforcement Rule 217(g) (relating to formerly admitted attorneys) by order directs Disciplinary Counsel to file an application under this rule [,] ; or
(iii) the attorney abandons his practice, disappears, dies or is transferred to inactive status because of incapacity or disability [, or disappears or dies] ; and
* * * * * (e) The conservator or conservators shall be appointed by the president judge from among members of the bar of this Commonwealth [who] , subject to the following:
(1) nondisciplinary counsel conservators:
(i) [are not representing] shall not represent any party who is adverse to any known client of the absent attorney; and
[(2)] (ii) shall have no adverse interest or relationship with the absent attorney or his or her estate.
Official Note: Nothing in the Rules of Professional Conduct relating to conflict of interest, confidentiality, or any other provision, shall prevent the Office of Disciplinary Counsel from serving as conservator, and from subsequently pursing an investigation, and disciplinary prosecution of the absent attorney, based upon information gathered during the course of disciplinary counsel's service as a conservator, given that office's unique duties and responsibilities to protect the public and the integrity of the judicial system.
* * * * * (g) The filing by Disciplinary Counsel or any other interested person of an application for the appointment of a conservator under these rules shall operate as an automatic stay of all pending legal or administrative proceedings in this Commonwealth where the absent attorney is counsel of record until the earliest of such time as:
(1) the application for appointment of a conservator is denied;
(2) the conservator is discharged;
(3) the court, tribunal, magisterial district or other government unit in which a matter is pending orders that the stay be lifted; or
(4) 30 days after the court, tribunal, magisterial district or other government unit in which a matter is pending is notified that substitute counsel has been retained.
(h) As used in this rule, the term ''government unit'' has the meaning set forth in 42 Pa.C.S. § 102 (relating to definitions).
Rule 322. Duties of conservator.
* * * * * (c) [The conservator shall send written notice to all clients of the absent attorney of the fact of the appointment of a conservator, the grounds which required such appointment, and the possible need of the clients to obtain substitute counsel. All such notices shall include the name, address and telephone number of any lawyer referral service or similar agency available to assist in the location of substitute counsel. The conservator shall, if necessary, send a second written notice to all clients of the absent attorney whose files appear to be active. A file may be returned to a client upon the execution of a written receipt, or released to substitute counsel upon the request of the client and execution of a written receipt by such counsel. The conservator shall deliver all such receipts to the appointing court at the time of filing the application for discharge. On approval by the appointing court of the application for discharge, all files remaining in the possession of the conservator shall be destroyed by the conservator in a secure manner which protects the confidentiality of the files.]
(1) The conservator shall make a reasonable effort to identify all clients of the absent attorney whose files were opened within five (5) years of the appointment of the conservator, regardless of whether the case is active or not, and a reasonable effort to identify all clients whose cases are active, regardless of the age of the file. The conservator shall send all such clients, and former clients, written notice of the appointment of a conservator, the grounds which required such appointment, and the possible need of the clients to obtain substitute counsel. All such notices shall include the name, address and telephone number of any lawyer referral service or similar agency available to assist in the location of substitute counsel. The conservator shall, if necessary, send a second written notice to all clients of the absent attorney whose files appear to be active.
(2) All clients whose files are identified by the conservator as both inactive and older than five (5) years shall be given notice by publication of the appointment of a conservator, the grounds which required such appointment, and the possible need of the clients to obtain substitute counsel. All such notices shall include the name, address and telephone number of any lawyer referral service or similar agency available to assist in the location of substitute counsel. The specific method of publication shall be approved by the appointing court, as to both the method, and duration, of publication. The conservator shall deliver proofs of publication to the appointing court at the time of filing the application for discharge.
(3) A file may be returned to a client upon the execution of a written receipt, or released to substitute counsel upon the request of the client and execution of a written receipt by such counsel. The conservator shall deliver all such receipts to the appointing court at the time of filing the application for discharge. On approval by the appointing court of the application for discharge, all files remaining in the possession of the conservator shall be destroyed by the conservator in a secure manner which protects the confidentiality of the files.
* * * * * (e) The conservator shall file a written report with the appointing court and the Board no later than 30 days after the date of appointment covering the matters specified in subdivisions (a) through (c) of this rule. If those duties have not been accomplished, then the conservator shall state what progress has been made in that regard. Thereafter, the conservator shall file a similar written report every [30] 60 days until discharge.
(f) In the case of a deceased attorney, the Conservator shall notify the executor of the estate of the Disciplinary Board's need to be reimbursed by the estate for the costs and expenses incurred in accordance with Rule 328(c) (relating to compensation and expenses of conservator.)
Rule 324. Bank and other accounts.
* * * * * (c) The conservator may engage the services of a certified public accountant when considered necessary to assist in the bookkeeping and auditing of the financial accounts and records of the absent attorney.
(1) If the state of the financial accounts and records of the absent attorney, or other relevant circumstances, render a determination as to ownership of purported client funds unreasonable and impractical, the conservator shall petition the appointing court for permission to pay all funds held by the absent attorney in any trust, escrow, or IOLTA account, to the Disciplinary Board for any unreimbursed costs of the conservatorship and to the Lawyers Fund For Client Security for any awards made to clients of the absent attorney. In the event there are funds remaining in the accounts, the court in its discretion may direct that said funds be paid to the Disciplinary Board, the Lawyers Fund for Client Security or the Interest On Lawyers Trust Account (IOLTA) Board. Any petition filed under this subsection shall be served by publication, the specific method and duration of which shall be approved by the appointing court.
* * * * * Rule 325. Duration of conservatorship.
Appointment of a conservator pursuant to these rules shall be for a period of no longer than six months. The appointing court shall have the power, upon application of the conservator and for good cause, to extend the appointment for an additional three months. Any order granting such an extension shall include findings of fact in support of the extension. No additional extensions shall be granted absent a showing of extraordinary circumstances.
Rule 328. Compensation and expenses of conservator.
(a) A conservator [shall normally serve without compensation, but where a conservatorship is expected to be prolonged or require greater effort than normal the appointing court may, with the prior written approval of the Board Chairman, order that the conservator be compensated on an agreed basis. Any such agreement shall be filed with the Office of the Secretary.] not associated with the Office of Disciplinary Counsel shall be compensated pursuant to a written agreement between the conservator and the Board Chair. Compensation under such an agreement shall be paid at reasonable intervals, and at an hourly rate identical to that received by court-appointed counsel at the non-court appearance rate in the judicial district where the conservator was appointed. Where the conservator believes that extraordinary circumstances justify an enhanced hourly rate, the conservator may apply to the Board Chair for enhanced compensation. Such an application shall be granted only in those situations where extraordinary circumstances are shown to justify enhanced compensation.
[(b) Upon the completion of a conservatorship, the appointing court, with the prior written approval of the Board Chairman, shall have the power to award compensation or to increase compensation previously agreed to upon application of the conservator and upon demonstration by the conservator that the nature of the conservatorship was extraordinary and that failure to award or increase previously agreed compensation would work a substantial hardship on the conservator. In such event, compensation shall be awarded only to the extent that the efforts of the conservator have exceeded those normally required or reasonably anticipated at the time the original compensation agreement was approved.]
[(c)] (b) The necessary expenses (including, but not limited to, the fees and expenses of a certified public accountant engaged pursuant to Enforcement Rule 324(c)) and any compensation of a conservator or any attendant staff shall, if possible, be paid by the absent attorney or his or her estate. [If not so paid, then upon certification by the president judge of the appointing court and approval by the Board Chairman, the] Any expenses and any compensation of the conservator that are not reimbursed to the Board shall be paid as a cost of disciplinary administration and enforcement. [See Enforcement Rule 219(a) (relating to periodic assessment of attorneys).] Payment of any costs incurred by the Board pursuant to this rule that have not been reimbursed to the Board may be made a condition of reinstatement of a formerly admitted attorney or may be ordered in a disciplinary proceeding brought against the absent attorney.
[Pa.B. Doc. No. 08-1482. Filed for public inspection August 15, 2008, 9:00 a.m.]
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