Transcript Carlsmith Ball 2014Risk Management

Carlsmith Ball 2014
Risk Management
Beth Whitney, September 2014, Swiss Re
Table of Contents / Agenda
• Document Retention
• Social Media Update
• Top 10 Legal Malpractice Avoidance Tips
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Document Retention
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What is a document?
• Wills
• Deeds
• Correspondence
• Pleadings
• Tax returns
• Email
• Voicemail
• Texts
• CDs, DVDs, flash drives, hard drives
• Research
• Etc.
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Seven main principles of document retention
1. Generally, the file belongs to the client
2. Consider ethical, legal and practical obligations
3. Some files "die" but some live on forever
4. Consider the statute of limitations for legal malpractice
5. Paper and electronic destruction plans must align
6. Get written consent before you destroy
7. Keep a log of what you destroy/return
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Who owns the file?
• Majority rule: the entire file belongs to the client
• Primary minority rule: the file belongs to the client wrt end product but not
work product
• Minority rule: the file belongs to the lawyer
You suspect the client may sue you for malpractice. So you want to keep
copies of the file. Can you? Who pays the expense of copying?
Client hires new counsel. They want you to send file (100 boxes) to new
counsel in NY. Who pays for file to be sent?
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Ethical considerations
Rule 1.16. DECLINING OR TERMINATING REPRESENTATION
(d) Upon termination of representation, a lawyer shall take steps to the extent
reasonably practicable to protect a client's interests, such as giving
reasonable notice to the client, allowing time for employment of other
counsel, surrendering papers and property to which the client is entitled and
refunding any advance payment of fee or expense that has not been earned or
incurred.
Comment:
[10]The papers to which a client is entitled upon termination of representation may
include all documents in the lawyer’s file except (a) documents which were only for
review and use by the lawyer and persons in the lawyer’s office and which the lawyer
reasonably believes will not be of material use or benefit to the client or successor
lawyer; (b) documents which would violate a duty of confidentiality owed to a third
party; (c) documents which cannot be copied or disclosed pursuant to a court order or
other law; and (d) documents which may cause the client or a third party physical or
psychological harm.
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Ethical considerations continued
Rule 1.15. PRESERVING IDENTITY OF FUNDS AND PROPERTY OF A CLIENT
OR THIRD PERSON
(a) A lawyer shall hold property of clients or third persons that is in a lawyer’s
possession in connection with a representation separate from the lawyer’s
own property, as a fiduciary. The lawyer shall not commingle such funds or
property with his or her own or misappropriate such funds or property to his
or her own use or benefit. Funds shall be kept in a separate account in Hawai‘i
in accordance with Rule 11 of the Rules of the Supreme Court of the State of
Hawai‘i, and Rule 4 of the Hawai‘i Rules Governing Trust Accounting. Other
tangible property owned by a client or third person shall be identified as such,
appropriately safeguarded , and a record kept of the item’s receipt and
disbursement. Complete records of such account funds and other property
shall be kept by the lawyer and shall be preserved for a period of 6 years after
the termination of the representation.
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Ethical considerations continued
Rule 3.4. FAIRNESS TO OPPOSING PARTY AND COUNSEL
A lawyer shall not:
(a) unlawfully obstruct another party's access to evidence or unlawfully alter,
destroy or conceal a document or other material having potential evidentiary
value. A lawyer shall not counsel or assist another person to do any such act;
Rule 1.6. CONFIDENTIALITY OF INFORMATION.
(a) A lawyer shall not reveal confidential information relating to the
representation of a client unless the client consents after consultation, the
disclosure is impliedly authorized in order to carry out the representation, or
as stated in paragraph (b) or (c).
In disposing of a client’s closed file, a lawyer should take care to
protect the confidentiality of the contents.
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Legal considerations
How long should you keep closed files?
• It depends
• Once the matter ends, determine if the file is "alive" or "dead"
• Statute of limitations for a legal malpractice case, consider tolling, discovery
rule, involvement of a minor
• Statute of repose
• The client was troublesome, follow your gut
• State and Federal laws may require retention of personnel files or payroll
information
• Federal laws that have a record keeping requirement: Fair Labor Standards
Act, Equal Pay Act, Age Discrimination in Employment Act, HIPAA
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Is the file "dead" or "alive"?
Alive
• Original estate planning docs
(wills trusts tax, pension)
• Unsatisfied judgment
• Real estate documents
• Minor involved
• Tax basis
• Divorce if alimony, maintenance or
minors involved
• Structured settlements
• Collection files until paid
• Chapter 11 BK
• Criminal until incarceration ends
• Intellectual property registrations
Dead
• Litigation: Judgment satisfied,
past time for appeals or appeals
final
• Real estate transaction with no
retained critical documents
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Practical considerations
How long should you keep closed files?
• Cost of maintaining paper or electronic files
• Will your insurance cover a related claim?
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Zubulake v. UBS Warburg LLC US SDNY
• Sanctions considered for spoliation where a defendant lost or destroyed
several emails and back-up tapes which the plaintiff believed would prove
her employment discrimination case
• Court found willful destruction, and gave an adverse inference jury
instruction
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Discovery hold
A litigation hold is required when:
• (1) The Company receives a demand to preserve the record(s);
• (2) the Company is aware that a lawsuit or administrative action has been
filed;
• (3) the Company receives a preservation order from the Court, OR;
• (4) litigation is reasonably foreseeable.
• Understand that a record is stale and therefore subject to destruction where
the record no longer has any operational, business or legal value to the
Company, any applicable retention period(s) has expired AND the record is
not subject to a litigation hold.
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What is destruction?
• Confidentiality is the main concern HRPC 1.6
• How do you destroy a physical file?
– burning, shredding, obliterating to an unreadable form
• How do you destroy an electronic file?
– deletion is not satisfactory
– shredding, obliterating to an unreadable form
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What can generally be culled from a file prior to storage or
return to client?
• Legal memoranda, briefs, pleadings and other documents that can be
reproduced from other sources
• Drafts of documents otherwise preserved in final form unless the process of
creating the final document might later be an issue. Marked up copies may
be of use.
• Copies of published opinions and other available published material
• Duplicates
Keep a log of what you cull. You may need a
complete picture of the file someday
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Managing client expectations
• In the beginning, talk about
– who owns the file
– which documents will be returned and which will be retained in the file for how long
• Engagement letter
– reiterate who owns the file and firm policy wrt storage and destruction of file at the
conclusion of the representation
• Closing letter
– how long the file will be preserved
– duty of client to keep firm apprised of changing contact information
– client may obtain the file – if client requests, get a signed receipt
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Managing client expectations
• Letter before you destroy
– file will be destroyed no sooner than 90 days from date of letter
– client may obtain file – send original to client or make it available
– if firm has not heard back from client, firm will assume there are no objections and
will destroy
– if letter comes back undelivered, find client or keep indefinitely
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Internal firm procedures
• Open file – consider subfiles (eg notes, research, etc)
• Engagement letter – describe firm policy and get consent
• Scan important documents, mark as such
• Matter concludes
• Closing letter sent
• File indexed
• File culled for unnecessary documents/attorney thoughts
• File returned to client (consider rules, SOL, repose, copy,) OR
• File stored for agreed to period of time
• If file is stored by firm at the close of the matter for additional time,
– send destruction letter before it is destroyed
– review documents before anything is destroyed
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Social Media Update
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Hypotheticals
Philadelphia Bar Opinion 2009-02
• Can a lawyer have a third-party "friend" a witness to access the witness's
Facebook and MySpace accounts? The third-party provides truthful
information about the third-party but conceals his association with the
inquiring lawyer and the real purpose behind "friending" the witness
(obtaining potential impeachment material)?
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PA RPCs 4.1(a), 5.3(c), and 8.4(c) are identical to Hawaii
RPCs
PA RPC 4.1(a) In the course of representing a client a lawyer shall not
knowingly:
(a) make a false statement of material fact or law to a third person;
PA RPC 8.4(c)It is professional misconduct for a lawyer to:
(c) engage in conduct involving dishonesty, fraud, deceit or
misrepresentation;
PA RPC 5.3(c) With respect to a nonlawyer employed or retained by or
associated with a lawyer:
(c) a lawyer shall be responsible for conduct of such a person that would
be a violation of the Rules of Professional Conduct if engaged in by a
lawyer if:
(1) the lawyer orders or, with the knowledge of the specific conduct,
ratifies the conduct involved;
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Hypothetical
NY State Bar Association Opinion 843
• Can a lawyer view a Facebook or MySpace profile of another party's social
networking site for the purpose of gathering information for a client in
pending litigation?
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Hypothetical
NY State Bar Association Opinion 843
• Can a lawyer view a Facebook or MySpace profile of another party's social
networking site for the purpose of gathering information for a client in
pending litigation?
• Yes, a lawyer may view a party's Facebook or MySpace profile as long as the
party's profile is available to all members in the network and the lawyer
doesn't "friend" the party to see it or contact the other party or direct
someone else to do so
• So long as no deception (sins of omission count!) occurs 8.4 and 4.1not
implicated
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Hypothetical
San Diego County Bar Legal Ethics Opinion 2011-2
• An attorney represented a former employee in a wrongful discharge action.
The former employee-client gave his attorney a list of all the other
employees. The employer was represented by counsel. The attorney sent
out "friend" requests to 2 high-ranking company employees who the client
felt were also dissatisfied with the employer. The attorney anticipates that
these employees will make disparaging remarks about the employer on
facebook. Has the attorney violated his ethical obligations?
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Hypothetical
San Diego County Bar Legal Ethics Opinion 2011-2
HI RPC 4.2 In representing a client, a lawyer shall not communicate about the
subject of the representation with a person the lawyer knows to be
represented by another lawyer in the matter, unless the lawyer has the consent
of the other lawyer or is authorized to do so by law or a court order.
• The term "high ranking employees" suggests that these employees "exercise
substantial discretionary authority over decisions that determine
organizational policy" and were treated as part of the represented corporate
party
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Fawcett v. Altieri
2013 NY Slip Opinion 23010
• Plaintiff-Fawcett (a high school student) allegedly suffered an eye injury
during an altercation with another student (Altieri) at a tennis match
• During litigation Altieri requested authorizations for full access to
…information and photographs on … facebook, MySpace, etc.
• Plaintiff Fawcett's accounts were made "private" with no information
available for public consumption. When they were made "private" is unclear
• Two prong test: 1. is the content in the social media account "material and
necessary" and then a balancing test applies 2. whether the production of
this content would result in a violation of privacy rights
• Timing is key
– "depositions must be conducted before one can properly determine whether the
plaintiff should be compelled to produce social media records;"
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Root v. Balfour Beatty Construction
2014 WL 444005 Fla. 2d DCA February 5, 2014
• Personal injury matter brought by the mother of a three year old boy (Gage)
who was injured when he was a pedestrian and struck by a vehicle in front
of a construction site. Mother alleges Balfour Beatty Construction failed to
use reasonable care to keep the construction site safe for pedestrians. Loss
of consortium claims were also alleged.
• Defendants requested: Any and all postings, statuses, photos, "likes" or
videos related to mom's:
– relationships with Gage and her other children, both prior to, and following, the
accident;
– relationships with other family members, boyfriends, husbands, and/or significant
others, both prior to, and following the accident;
– mental health, stress complaints, alcohol use or other substance use, both prior to
and after, the accident;
– facebook account postings relating to any lawsuit filed after the accident by Mom
or others
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Root v. Balfour Beatty Construction
2014 WL 444005 Fla. 2d DCA February 5, 2014
• Balfour must establish that the information sought is 1. relevant to the
case's subject matter and 2. admissible in court or reasonably calculated to
lead to admissible evidence
• Negligence count – none of the info sought pertains to the accident itself
• Consortium count – "appears at this time to be irrelevant" "Although Root's
deposition has been taken, Defendants do not point to anything claimed by
her in support of their contention that the requested information is relevant
and discoverable."
• No fishing expeditions
• The magistrate expressed misgivings at the possibility that large amounts of
material might have to be reviewed in camera
• "Should further developments in litigation suggest that the requested
information may be discoverable, the trial court may have to review the
material in camera"
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Why in camera reviews may not be the answer
• 1.23 Billion active facebook users
• 375,870 filings in US District courts in 2013
• In camera review not practical
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Salvato v. Miley
12 CV635 Oc 10PRL (M.D. FL 6/11/13)
• Wrongful death case that alleged Deputies Miley and Brown used excessive
force shooting Vincent Salvato and failing to provide medical treatment
• Plaintiff requested in his interrogatories among other things:
– a copy of any and all electronic communication either sent or received by
you through social networking sites, including but not limited to,
facebook, Twitter, and/or MySpace between July 5, 2012 – February 1,
2013, that relate in any way to the incident…. Please exclude any
electronic communications that were sent and/or received exclusively
between yourself and your attorney.
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Salvato v. Miley 12 CV635 Oc 10PRL (M.D. FL June 11,
2013)
• Court would not allow
• Court said: Plaintiff has failed to make a threshold showing that the
requested information is reasonably calculated to lead to the discovery of
admissible evidence. … The mere hope that Brown's private …
communication might include an admission against interest, without more,
is not a sufficient reason to require Brown to provide Plaintiff open access
to his private communications with third parties.
How can a party make a threshold showing that the information is material
and necessary?
How could the interrogatory be asked more narrowly so as not to constitute a
"fishing expedition"?
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Allied Concrete Company v. Isaiah Lester
Supreme Court of VA Jan 2013
• Lester's wife was killed when a truck driven by Sprouse lost control, crossed
the center line and fell on Jessica Lester. Isaiah was driving the car Jessica
was traveling in
• Lester's attorney thru a paralegal instructed him to clean up his page. Lester
deleted account
• Adverse inference jury instruction given at trial
• Jury awarded Lester over $8.5M
• Trial court granted remittitur of $4M
• Trial court awarded sanctions against Lester ($180k) and his attorney
($542k)
• Appellate court denied Allied's motion for new trial but granted Lester's
motion to reverse the trial court's remittitur; sanctions were not challenged
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Social media discovery summary and steps you can take
to get access to opponent's account
• Most courts agree that a party's social media is discoverable – little or no
expectation of privacy
• However, you must show some basis of necessity for the discovery
• Timing is key – bad case law is created when you prematurely seek info
• When assigned a case, establish opposing party's social media presence by
doing a search of publically available activity, document and preserve
• Interrogatories should ask specific questions about social media and limit
time frame as much as possible so as to avoid accusation of "fishing"
• If they won't answer, consider court intervention, or waiting until you can
gather further support
• At deposition ask additional specific questions about types, frequency,
changes in privacy settings, friends and family, etc.
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What to tell your clients to prevent social media from
hurting their case and an adverse inference instruction
• Be careful what you post
• Don't delete anything
• Don't change privacy settings???
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Top 10 legal malpractice
avoidance tips
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Top 10 lawyers legal malpractice tips
Tip #1: Properly screen potential clients
Tip #2: Avoid conflicts of interest
Tip #3: Properly docket – know your deadlines
Tip #4: Know the law and apply it properly – don’t dabble
Tip #5: Document, document, document
Tip #6: Focus on the workplace – HI LAP
Tip #7: Avoid needless fee disputes
Tip #8
Re-read the Professional Rules of Conduct including
comments
Tip #9:
Build relationships at all levels
Tip #10: Don’t assume you won’t get sued – be paranoid!
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