Bill would encourage settlements

by SCOTT DREXEL


A bill pending in the legislature would allow attorneys charged with misconduct to enter nolo contendere pleas similar to those now permitted in criminal proceedings.

In its August 1994 report regarding the State Bar's discipline system, the Discipline Evaluation Committee (DEC), chaired by senior Judge Arthur Alarcon of the Ninth Circuit Court of Appeals, recommended the use of nolo contendere or "no contest" pleas in attorney disciplinary proceedings as a potential means for increasing the number of settlements in State Bar Court proceedings.

Prior to the creation of the full-time State Bar Court in 1989, the settlement rate of disciplinary proceedings was approximately 17 percent. By 1991, the settlement rate had increased to slightly more than 50 percent and has remained there for the past five years.

DEC recognized that one of the most serious obstacles to the stipulated resolution of the disciplinary proceedings was the concern on the part of attorneys that their admissions of misconduct could be used by their clients in subsequent legal malpractice actions.

As a result, these attorneys refuse to admit to their misconduct in the disciplinary proceeding and often attempt to prolong the proceeding as long as possible, even though they do not seriously dispute the accuracy of the factual allegations against them.

Assembly bill 2787, introduced by Assembly member Sheila Kuehl, would add Business & Professions Code 6085.5 to permit attorneys to plead nolo contendere to the disciplinary charges filed against them.

Under AB 2787, the legal effect of the plea would be the same as that of an admission of culpability in the discipline proceeding. However, any admissions required by the State Bar Court during its inquiry into the voluntariness of the plea or during its inquiry into the factual basis for the plea could not be used against the attorney as an admission in any civil action that is based upon the same act on which the disciplinary proceeding is based.

However, while the attorney's admissions made in connection with his or her nolo contendere plea could not be used in a client's legal malpractice action, the plea would not preclude the State Bar Court from protecting the client's rights by requiring the attorney, as a condition of any discipline imposed, to make restitution to the client of improperly withheld funds or unearned advanced fees and to return to the client all client files, papers and property.

If enacted in this legislative session, the addition of proposed Business & Professions Code 6085.5 would take effect Jan. 1, 1997.


Scott Drexel is chief court counsel and administrative officer for the State Bar Court.

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