BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 267
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          Date of Hearing:   April 2, 2013

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                Bob Wieckowski, Chair
                   AB 267 (Chau) - As Introduced:  February 7, 2013

                    PROPOSED CONSENT (As Proposed to Be Amended)
           
          SUBJECT  :  EVIDENTIARY PRIVILEGES:  LAWYER REFERRAL SERVICE-  
          CLIENT PRIVILEGE

           KEY ISSUE  :  SHOULD CONFIDENTIAL COMMUNICATIONS BETWEEN A LAWYER  
          REFERRAL SERVICE AND ITS CLIENT BE GIVEN EVIDENTIARY PRIVILEGE  
          SIMILAR TO THAT WHICH NOW PROTECTS CONFIDENTIAL COMMUNICATIONS  
          BETWEEN LAWYERS AND THEIR CLIENTS?

           FISCAL EFFECT  :  As currently in print this bill is keyed  
          non-fiscal.

                                      SYNOPSIS
          
          This bill seeks to establish a new evidentiary privilege to  
          protect the confidentiality of communications between a lawyer  
          referral service (LRS) and its clients.  Because prospective  
          clients consult a LRS for the same reason they would consult a  
          lawyer-namely, to obtain legal advice or to seek legal  
          representation-the author reasonably contends that the  
          prospective client in both cases should be able to speak  
          completely candidly about the legal matter, free from fear that  
          any embarrassing or self-incriminating information will be  
          subject to discovery in litigation.  Existing law, however, does  
          not specifically extend the lawyer-client evidentiary privilege  
          to communications between a LRS and a client.  This bill would  
          establish a stand-alone LRS-client privilege modeled after  
          several principles of existing lawyer-client privilege, but with  
          some appropriate differences.  The bill is sponsored by the  
          Conference of California Bar Associations and there is no known  
          opposition.

           SUMMARY  :  Establishes evidentiary privilege to protect the  
          confidentiality of communications between a lawyer referral  
          service (LRS) and its clients.  Specifically,  this bill  , among  
          other things:   

          1)Establishes that, except as otherwise provided, a client,  








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            whether or not a party, has a privilege (hereafter "LRS-client  
            privilege) to refuse to disclose, and to prevent another from  
            disclosing, a confidential communication between client and  
            lawyer referral service, if the privilege is properly claimed  
            by the privilege holder, someone authorized by the holder, or  
            in some cases, the LRS. 

          2)Requires a lawyer referral service that has received or made a  
            communication subject to the LRS-client privilege to claim the  
            privilege if the communication is sought to be disclosed and  
            the client has not consented to the disclosure.

          3)Provides that the right of any person to claim a LRS privilege  
            created by this bill is waived with respect to a communication  
            protected by the privilege if any holder of the privilege,  
            without coercion, has disclosed a significant part of the  
            communication or has consented to disclosure made by anyone.

          4)Provides there is no privilege in certain situations where the  
            services of the LRS were sought or obtained to enable the  
            commission of a crime or fraud, or where the LRS reasonably  
            believes that disclosure is necessary to prevent a criminal  
            act likely to result in death or substantial bodily harm to a  
            person.

           EXISTING LAW  :  

          1)Provides that it is the duty of an attorney to maintain  
            inviolate the confidence, and at every peril to himself or  
            herself to preserve the secrets, of his or her client unless  
            the attorney reasonably believes the information is likely to  
            result in death or substantial bodily harm.  (Business and  
            Professions Code Section 6068(e).)

          2)Provides that a client of a lawyer has a privilege to refuse  
            to disclose, and to prevent another from disclosing, a  
            confidential communication between the client and lawyer if  
            the privilege is claimed by:

             a)   The holder of the privilege;
             b)   A person who is authorized to claim the privilege by the  
               holder; or
             c)   The person who was the lawyer at the time of the  
               confidential communication, except as provided.  (Evidence  
               Code Section 954.  Unless stated otherwise, all further  








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               statutory references are to that code.)

          3)Provides that the right of any person to claim a privilege  
            provided by Section 954 (lawyer-client privilege), 980  
            (privilege for confidential marital communications), 994  
            (physician-patient privilege), 1014 (psychotherapist-patient  
            privilege), 1033 (privilege of penitent), 1034 (privilege of  
            clergyman), 1035.8 (sexual assault counselor-victim  
            privilege), or 1037.5 (domestic violence counselor-victim  
            privilege) is waived with respect to a communication protected  
            by the privilege if any holder of the privilege, without  
            coercion, has disclosed a significant part of the  
            communication or has consented to disclosure made by anyone.   
            (Section 912(a).)

          4)Requires the lawyer who received or made a communication  
            subject to the lawyer-client privilege to claim the privilege  
            whenever he is present when the communication is sought to be  
            disclosed, and is authorized to claim the privilege.  (Section  
            955.)

          5)Requires the State Bar, with the approval of the Supreme  
            Court, to formulate and enforce rules and regulations which,  
            among other things, do the following:

             a)   Establish minimum standards for lawyer referral services  
               that include provisions ensuring that panel membership  
               shall be open to all attorneys practicing in the  
               geographical area served who are qualified by virtue of  
               suitable experience.

             b)   Require that an entity seeking to qualify as a lawyer  
               referral service register with the State Bar and obtain  
               from the State Bar a certificate of compliance with the  
               minimum standards for lawyer referral services.

             c)   Require each lawyer who is a member of a certified  
               lawyer referral service to comply with all applicable  
               professional standards, rules, and regulations, and to  
               possess a policy of errors and omissions insurance, as  
               specified.  (Business and Professions Code Section  
               6155(f).)

           COMMENTS  :  This bill, sponsored by the Conference of California  
          Bar Associations, seeks to establish a new evidentiary privilege  








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          to protect the confidentiality of communications between a  
          lawyer referral service (LRS) and its clients.  Because  
          prospective clients consult a LRS for the same reason they would  
          consult a lawyer-namely, to obtain legal advice or to seek legal  
          representation-the author reasonably contends that the  
          prospective client in both cases should be able to speak  
          completely candidly about the legal matter, free from fear that  
          any embarrassing or self-incriminating information will be  
          subject to discovery in litigation.  Existing law, however, only  
          provides for lawyer-client evidentiary privilege, which does not  
          extend to communications between a LRS and a client.  This bill  
          would establish a stand-alone LRS-client privilege modeled after  
          principles of existing lawyer-client privilege, but with some  
          appropriate differences.

           Stated Need for the Bill  .  According to the author:

               AB 267 provides needed certainty to current law.   
               There is no specific statutory privilege to keep  
               confidential the information provided by a prospective  
               client to a LRS employee.  The confidentiality of this  
               information may be protected under various  
               interpretations of the attorney-client privilege  
               statutes, but it is unclear, and this uncertainty may  
               reduce the efficacy of communications between  
               prospective clients and lawyer referral services.  The  
               purpose of the bill is to remove all uncertainty as to  
               whether such communications are protected from  
               discovery in litigation, keep these communications  
               confidential, and to ensure free and candid  
               communication between prospective clients and LRS that  
               will enable the LRS to make the most appropriate  
               referral.

           Background on lawyer referral services.   A "lawyer referral  
          service" operates for the direct or indirect purpose of  
          referring potential clients to lawyers.  (Rule 4, "Rules and  
          Regulations of the State Bar of California Pertaining to Lawyer  
          Referral Services.")  The purposes of a LRS include (1) to  
          provide a way in which any person may be referred to a  
          qualified, insured lawyer who is able to render and is  
          interested in rendering needed legal services; and (2) to  
          provide information about lawyers and the availability of legal  
          services which will aid the public in their selection of a  
          lawyer.  (Rule 5.1.)  An entity seeking to qualify as a lawyer  








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          referral service must register with the State Bar and obtain  
          from the State Bar a certificate of compliance with the minimum  
          standards for lawyer referral services.  (BPC Section 6155(f).)   
          Certification shall be renewed at least every two years, and  
          denial of certification or recertification may occur if the  
          State Bar determines noncompliance with either statutory  
          requirements or minimum standards governing LRS.  (BPC Section  
          6155(g).)

           The ABA Model Rules endorse evidentiary privilege for LRS-client  
          communications.   In 1989, following a long review process by  
          state and local bar association and lawyer referral experts from  
          the public and private sector, the American Bar Association  
          (ABA) adopted model rules for the operation of public service  
          lawyer referral programs. The model rules are aspirational and  
          intended to provide guidance to state legislatures, but have not  
          been adopted in California.  Nevertheless, Rule XIV of the ABA's  
          "Model Rules Governing Lawyer Referral and Information Services"  
          specifically provides that disclosure of information to a lawyer  
          referral service for the purpose of seeking legal assistance  
          shall be deemed a privileged lawyer-client communication. The  
          Commentary to Rule XIV explains:  "Since a client discloses  
          information to a lawyer referral service for the sole purpose of  
          seeking the assistance of a lawyer, the client's communication  
          for that purpose should be protected by lawyer-client  
          privilege."  This bill would establish a stand-alone LRS  
          privilege that would also accomplish the goal of protecting the  
          confidentiality of communications that a client discloses to a  
          lawyer referral service.

           Author's Amendments:   In order to more fully harmonize the  
          LRS-privilege proposed by this bill with lawyer-client privilege  
          under existing law, the author has proposed to make several  
          amendments in this Committee.  Among other things, the proposed  
          amendments: (1) standardize the definitions of "lawyer referral  
          service", "client", "confidential communication between client  
          and LRS" and "holder of the privilege"; (2) clarify the  
          relationship between LRS and client; (3) incorporate two  
          exceptions to the privilege in cases where LRS services were  
          sought or obtained to commit a crime or fraud, or where  
          disclosure is believed necessary to prevent a criminal act  
          resulting in substantial bodily harm to an individual.

           Contrasts between proposed LRS privilege and lawyer-client  
          privilege.   As proposed to be amended, the LRS privilege created  








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          by this bill more closely reflects lawyer-client privilege under  
          current law.  For example, the author's amendments establish  
          consistent and analogous definitions of key terms, who holds the  
          privilege, and the precise conditions under which the privilege  
          can be claimed.  However, not every characteristic of the  
          lawyer-client privilege has been replicated by the author to  
          apply to the proposed LRS-client privilege.

          A. Exceptions for probate related matters.  Evidence Code  
          Sections 957, 959, 960, and 961 limit the scope of the lawyer  
          client-privilege because they eliminate privilege in a number of  
          situations related to issues involving wills, deeds, trusts, and  
          probate matters affecting an interest in property.  For example,  
          Section 959 provides that no lawyer-client privilege exists as  
          to a communication relevant to an issue concerning the intention  
          or competence of a client executing an attested document of  
          which the lawyer is an attesting witness, or concerning the  
          execution or attestation of such a document.  This bill does not  
          reflect such an exception because, according the author, by  
          their nature lawyer referral services do not witness the signing  
          of documents, making an exception unnecessary. 

          Similarly, the author contends that because lawyer referral  
          services do not provide legal advice regarding probate matters,  
          nor engage in communications relevant to issues concerning the  
          validity of deeds of conveyance or wills, there is no need to  
          replicate exceptions analogous to Section 957, 960 and 961 under  
          the statute establishing LRS-client privilege.  At the time of  
          this analysis, it could not be confirmed that every LRS in the  
          state does not, in fact, engage in communications with clients  
          relating to trust, will, or probate matters.

          B. Exception for breach of duty.  Section 958 provides that  
          there is no lawyer-client privilege as to a communication  
          relevant to an issue of breach, by the lawyer or by the client,  
          of a duty arising out of the lawyer-client relationship.   
          According to the California Law Revision Commission, this  
          exception exists because it would be unjust to permit a client  
          to accuse his attorney of breach of duty and to invoke the  
          privilege to prevent the attorney from introducing evidence to  
          defend the charge.  It would also be unjust to permit the client  
          to refuse to pay his attorney's fee and invoke the lawyer-client  
          privilege to defeat the attorney's claim.  (7 Cal. Law Rev.  
          Comm. Reports 1 (1965).)









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          As proposed to be amended, this bill would not contain an  
          analogous exception for a breach of duty arising out of the  
          LRS-client relationship.  According to the sponsor, this  
          exception is not appropriate in the LRS context because it is  
          too broad and may result in unintended consequences.  CCBA  
          states:

               Section 958 principally provides protection for the  
               attorney in malpractice actions, by permitting the attorney  
               to reveal otherwise privileged information when accused of  
               breach by the client.  It also allows the attorney to  
               reveal otherwise privileged information if the client  
               breaches their agreement (e.g., doesn't pay).  Neither of  
               these circumstances is generally applicable to the  
               LRS-client relationship.  Malpractice suits against LRS are  
               not an issue, for there are no negligent referral cases  
               stemming from a LRS in the country, to our knowledge.   
               Furthermore, the amount that changes hands - or is supposed  
               to- between the client and LRS is not enough to warrant  
               legal action.  (An analogous exception to Section 958) also  
               could encourage a third party to try to get around the  
               privilege by claiming that either the LRS or the client  
               breached the contractual relationship and therefore the  
               third party should be able to compel disclosure, which is  
               contrary to the objective of the statute.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Conference of California Bar Associations (sponsor)

          Opposition 
           
          None on file
           
          Analysis Prepared by  :    Anthony Lew / JUD. / (916) 319-2334