BILL ANALYSIS                                                                                                                                                                                                    






                             SENATE JUDICIARY COMMITTEE
                             Senator Noreen Evans, Chair
                              2013-2014 Regular Session


          AB 267 (Chau)
          As Amended April 9, 2013
          Hearing Date: June 4, 2013
          Fiscal: No
          Urgency: No
          RD


                                        SUBJECT
                                           
          Evidentiary Privileges: Lawyer Referral Service-Client Privilege

                                      DESCRIPTION  

          This bill would establish a lawyer referral service (LRS)-client  
          evidentiary privilege to protect confidential communications, as  
          specified.  This bill would provide that no privilege exists  
          where: (1) the services of the LRS were sought or obtained to  
          enable or aid anyone to commit or plan to commit a crime or a  
          fraud; or (2) disclosure of the confidential communication is  
          necessary to prevent a criminal act that the LRS staff person  
          reasonably believes is likely to result in the death of, or  
          substantial bodily harm to, an individual.  This bill would  
          additionally provide the LRS-client privilege would be waived in  
          accordance with existing law.  

                                      BACKGROUND  

          An evidentiary privilege permits an otherwise competent witness  
          to refuse to testify and/or prevent another from testifying.   
          Privileges are policy exclusions, unrelated to the reliability  
          of the information involved, which are granted because it is  
          considered more important to keep that information confidential  
          than it is to require disclosure of all the information relevant  
          to the issues in a pending proceeding.  For example, to protect  
          the lawyer-client relationship, it is necessary to prevent  
          disclosure of confidential communications made in the course of  
          that relationship.  (Comments to Evid. Code Sec. 910.)  Whereas  
          privileges of a witness under the Federal Rule of Evidence are  
          governed by the principles of common law as interpreted by  
          United States courts in light of "reason and experience," the  
                                                                (more)



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          only privileges that are recognized in California are those  
          statutory privileges expressly codified in the Evidence Code.   
          (See Fed. Rules of Evid., Rule 501; Evid. Code Sec. 911.)  

          To date, California has codified several evidentiary privileges,  
          recognizing the need to protect the confidentiality of certain  
          communications.  Among those are the: lawyer-client privilege,  
          spousal privilege, confidential marital communications  
          privilege, physician-patient privilege, psychotherapist-patient  
          privilege, clergyman-penitent privilege, sexual assault  
          counselor-victim privilege, domestic violence counselor-victim  
          privilege, and human trafficking caseworker-victim privilege.   
          Yet other statutory privileges protect official information  
          acquired in confidence by a public employee and the identity of  
          informants, protect persons from having to reveal their votes in  
          public elections, and protect against disclosure of trade  
          secrets.  (Evid. Code Sec. 930 et seq.)  

          Under the existing lawyer-client privilege, when a person  
          discusses their case with an attorney, the information shared  
          with that attorney is generally privileged, including  
          information provided in the initial consult (i.e. before hiring  
          the attorney).  Even the name or decision to retain counsel can  
          be privileged.  In order to find an attorney, some people seek  
          advice from lawyer referral services, which are specified  
          entities that assist people find a lawyer experienced in the  
          area in which they are having legal problems. As such, lawyer  
          referral services can be made privy to information relating to a  
          person's legal problem or case in the performance of that  
          service.  

          In 1989, American Bar Association (ABA) adopted model rules for  
          the operation of these programs, including a rule that  
          disclosure of information to a lawyer referral service for the  
          purpose of seeking legal assistance shall be deemed a privileged  
          lawyer-client communication.  In its commentary, the ABA  
          explained that "[s]ince 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." (ABA  
          Model Supreme Court Rules Governing Lawyer Referral and  
          Information Services (Aug. 1993), Rule XIV.)  Though ABA model  
          rules are designed to provide guidance to states, California has  
          not expressly addressed the confidentiality of communications  
          made to a lawyer referral service.   

                                                                      



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          This bill seeks to codify a privilege similar to the  
          lawyer-client privilege, for confidential communications between  
          a lawyer referral service and client.

                                CHANGES TO EXISTING LAW
             
           1.Existing law  governs the advertising and operation of lawyer  
            referral services and, among other things, requires the State  
            Bar, with Supreme Court approval, to formulate and enforce  
            rules and regulations that, among other things:
                 require that an entity seeking to qualify as a lawyer  
               referral service register with the State Bar and obtain a  
               certificate of compliance with the minimum standards  
               established by the State Bar;
                 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; and 
                 require that, to increase access to the justice system  
               for all Californians, lawyer referral services establish  
               separate ongoing activities or arrangements that serve  
               persons of limited means.   (Bus & Prof. Code Sec.  
               6155(f).)
           
            Existing law  provides that an attorney has the duty to  
            maintain inviolate the confidence, and at every peril to  
            himself or herself to preserve the secrets, of his or her  
            client.  However, the attorney may, but is not required to,  
            reveal confidential information relating to the representation  
            of a client to the extent that the attorney reasonably  
            believes the disclosure is necessary to prevent a criminal act  
            that the attorney reasonably believes is likely to result in  
            death or substantial bodily harm.  (Bus. & Prof. Code Sec.  
            6068(e).)

             Existing law  provides that no person has a privilege to refuse  
            to be a witness; to refuse to disclose any matter or to refuse  
            to produce any writing, object, or thing; or prevent another  
            person from the same unless otherwise provided by statute.   
            (Evid. Code Sec. 911.) 

             Existing law  provides for a lawyer-client privilege, and  
            provides that no privilege applies:
                 if the services of the lawyer were sought or obtained to  
               enable or aid anyone to commit or plan to commit a crime or  
                                                                      



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               a fraud;
                 if the lawyer reasonably believes that disclosure of a  
               confidential communication relating to representation of a  
               client is necessary to prevent a criminal act that the  
               lawyer reasonably believes is likely to result in death or  
               substantial bodily harm;
                 as to a communication that is relevant to an issue of  
               breach, by the lawyer or by the client, of a duty arising  
               out of the lawyer-client relationship;
                 as to specified communications that are relevant to  
               issues in certain probate matters; or
                 in specified circumstances where two or more clients  
               have retained or consulted a lawyer upon a matter of common  
               interest.  (Evid. Code Sec. 950 et seq.) 

             This bill  would codify a lawyer referral service (LRS)-client  
            privilege, and would provide that no privilege applies:
                 if the services of the LRS were sought or obtained to  
               enable or aid anyone to commit or plan to commit a crime or  
               a fraud; or 
                 if a staff person of the LRS who receives a confidential  
               communication in processing a request for legal assistance  
               reasonably believes that disclosure of the confidential  
               communication is necessary to prevent a criminal act that  
               the staff person of the LRS reasonably believes is likely  
               to result in the death of, or substantial bodily harm to,  
               an individual.

             This bill  would define "client" as a person who, directly or  
            through an authorized representative, consults an LRS for the  
            purpose of retaining, or securing legal services or advice  
            from, a lawyer in his or her professional capacity, and  
            includes an incompetent who consults the LRS himself or  
            herself or whose guardian or conservator consults the LRS on  
            his or her behalf.

             This bill  would define "lawyer referral service" as an LRS  
            certified under, and operating in compliance with, Section  
            6155 of the Business and Professions Code above, or an  
            enterprise reasonably believed by the client to be an LRS  
            certified under, and operating in compliance with, that  
            section.

           1.Existing law  provides that the right of a person to claim  
            specified privileges is waived with respect to a protected  
            communication if the holder of the privilege has disclosed a  
                                                                      



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            significant part of that communication or consented to  
            disclosure, without coercion.  Existing law provides that a  
            disclosure does not constitute a waiver where it was  
            reasonably necessary to accomplish the purposes for which the  
            services of a lawyer, physician, psychotherapist, sexual  
            assault counselor, or domestic violence counselor was  
            consulted.  (Evid. Code Sec. 912(a), (d).)  

             This bill  would apply these and other related provisions to  
            the LRS-client privilege.  

           2.Existing law  defines "confidential communication between  
            client and lawyer" as information transmitted between a client  
            and his or her lawyer in the course of that relationship and  
            in confidence by a means that, so far as the client is aware,  
            does not disclose the information to third persons other than  
            those who are present to further the interest of the client in  
            the consultation or those to whom disclosure is reasonably  
            necessary for the transmission of the information or the  
            accomplishment of the purpose for which the lawyer is  
            consulted, and includes a legal opinion formed and the advice  
            given by the lawyer in the course of that relationship.   
            (Evid. Code Sec. 952.)  

             This bill  would define "confidential communication between  
            client and lawyer referral service" as information transmitted  
            between a client and an LRS in the course of that relationship  
            and in confidence by a means that, so far as the client is  
            aware, does not disclose the information to third persons  
            other than those who are present to further the interests of  
            the client in the consultation or those to whom disclosure is  
            reasonably necessary for the transmission of the information  
            or the accomplishment of the purpose for which the LRS is  
            consulted.

           3.Existing law  defines the holder of the lawyer-client privilege  
            as the client; the client's guardian or conservator if  
            applicable; the client's personal representative if the client  
            is dead; or the client's successor, assignee, or trustee.   
            (Evid. Code Sec. 953.)

             Existing law  provides a client the privilege to refuse to  
            disclose, and to prevent another from disclosing, a  
            confidential communication between client and lawyer if the  
            privilege is claimed by:
                 the holder of the privilege;
                                                                      



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                 a person authorized to claim the privilege by the holder  
               of the privilege; or
                 the person who was the lawyer at the time of the  
               confidential communication, but such person may not claim  
               the privilege if there is no holder of the privilege in  
               existence or if he is otherwise instructed by a person  
               authorized to permit disclosure.  (Evid. Code Sec. 954.)

             Existing law  provides that the relationship of attorney and  
            client shall exist between a law corporation as defined, and  
            the persons to whom it renders professional services, as well  
            as between such persons and members of the State Bar employed  
            by such corporation to render services to such persons.   
            (Evid. Code Sec. 954.)  

             Existing law  provides that the lawyer who received or made a  
            communication subject to the privilege must claim the  
            privilege whenever he is present when the communication is  
            sought to be disclosed and authorizes the lawyer to claim the  
            privilege.  (Evid. Code Sec. 955.)

             This bill  would define "holder of the privilege" as the  
            client; the client's guardian or conservator if applicable;  
            the client's personal representative if the client is dead; or  
            the client's successor, assignee, or trustee.

             This bill  would provide a client the privilege to refuse to  
            disclose, and to prevent another from disclosing, a  
            confidential communication between client and LRS if the  
            privilege is claimed by:
                 the holder of the privilege;
                 a person authorized to claim the privilege by the holder  
               of the privilege; or
                 the LRS or a staff person thereof, but the LRS or a  
               staff person thereof may not claim the privilege if there  
               is no holder of the privilege in existence or if the LRS or  
               a staff person thereof is otherwise instructed by a person  
               authorized to permit disclosure.

             This bill  would provide that the relationship of LRS and  
            client, for the purposes of this privilege, shall exist  
            between an LRS, as defined, and the persons to whom it renders  
            services, as well as between such persons and anyone employed  
            by the LRS to render services to such persons.  
             
            This bill  would provide that an LRS that has received or made  
                                                                      



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            a communication subject to this privilege must claim the  
            privilege if the communication is sought to be disclosed and  
            the client has not consented to the disclosure.

                                        COMMENT
           
          1.    Stated need for the bill  

          According to the author: 

            AB 267 would create a statutory privilege for communications  
            between a prospective client and a lawyer referral service  
            (LRS) certified by the State Bar of California, similar to the  
            attorney-client privilege and other privilege[s] listed in the  
            Evidence Code.  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 or recommendation.  [ .  
            . . ]

            Like individuals who consult with lawyers, individuals who  
            consult lawyer referral services do so to obtain legal advice  
            or representation to help them solve a legal problem.  In  
            order to obtain such advice or representation, it is  
            imperative that the prospective client be able to be  
            completely candid about the nature and extent of the problem,  
            free from fear that any embarrassing or self-incriminating  
            information will be subject to discovery in litigation.   [ .  
            . . ]  AB 267 will help facilitate honest and open  
            communications between prospective clients and lawyer referral  
            services and make clear that those communications are  
            privileged.  This, in turn, will make it possible for the  
            lawyer referral services to most effectively serve those  
            prospective clients, either by referring them to attorneys who  
            are experienced and knowledgeable in the appropriate areas of  
            law, or by recommending other courses of action which will  
            best serve the client's interest.

          2.    Lawyer referral services

           This bill would generally protect the confidentiality of  
          communications between a lawyer referral service (LRS) and a  
          person who consults with an LRS in order to obtain a referral to  
          an appropriate attorney for legal services or advice.  When a  
                                                                      



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          person contacts an LRS, he or she can expect to be interviewed  
          by the LRS staff about his or her legal problem and be matched  
          with a lawyer who is experienced in the appropriate area of law.  
           Additionally, if the LRS determines that the person's problem  
          can be resolved without a lawyer, the service will try to  
          provide information or the names of other organizations or  
          agencies that may be able to help that person.   

          Under existing law, the Business and Professions Code generally  
          governs lawyer advertisements, and in doing so prohibits any  
          person or entity from engaging in referral of potential clients  
          to attorneys, unless registered with the State Bar.  In turn,  
          the State Bar is required, with the approval of the Supreme  
          Court, to formulate and enforce rules and regulations to, among  
          other things, establish the minimum standards for and  
          certification of lawyer referral services.  (Bus. & Prof. Code  
          Sec. 6155.)  Those State Bar's Rules and Regulations note that  
          the purposes of an LRS are: 
           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; 
           to provide information about lawyers and the availability of  
            legal services which will aid the public in their selection of  
            a lawyer; 
           to inform the public when and where to seek legal and dispute  
            resolutions services; 
           to provide general, legal, and dispute resolution information  
            needed by the public; 
           to improve the quality of legal services available to the  
            public; and 
           to provide access to affordable legal services to the public.  
            (Rule 5.1.)  

          To achieve these purposes, the rules and regulations require  
          that each LRS establish such number and variety of panels of  
          attorneys (such as moderate and no fee panels, foreign language  
          panels, and alternative dispute panels) as will best enable it  
          to make referrals that are responsive to individual client  
          needs.  Moreover, in "an attempt to increase access to the  
          justice system for all Californians" an LRS must establish  
          separate ongoing activities or arrangements that serve persons  
          of limited means, unless it can demonstrate that it is  
          unreasonable and impractical to do so.  These include, for  
          example, programs that: provide free legal services to  
          indigents; provide legal services at a reduced fee; and provide  
          free legal advice and clearing house referral services to the  
                                                                      



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          public; or other cooperative efforts with existing pro bono  
          programs.  (Rule 12.5.)  

          Staff notes that while an argument might be made that a person  
          should reveal as little information about their case other than  
          the type and general dispute in obtaining a referral to an  
          attorney through lawyer referral services, those services are  
          designed to operate as a consumer service that goes beyond a  
          phone book directory of lawyers.  Accordingly, if these entities  
          are to be effective in helping people obtain necessary services,  
          it is feasible that person may need to divulge information that  
          unfortunately could be used against them by an adverse party.  

          In support of this bill, the Legal Aid Association of California  
          writes: "[u]nfortunately, if a prospective client reveals  
          potentially damaging secrets to [an LRS] in an effort to obtain  
          legal advice or counsel, there is not statutory privilege to  
          rely on.  If the person handling intake for the [LRS] is not an  
          attorney, the client runs the risk that an opposing lawyer could  
          subpoena documents and/or seek to depose the referral service  
          employee in an attempt to discover information related to their  
          case.  The absence of this statutory privilege may hamper the  
          communication between prospective clients and lawyer referral  
          services, which makes it difficult for referral service  
          employees to gather the information necessary to make a referral  
          to the appropriate lawyer."  

          Thus, in creating an LRS-client privilege, this bill seeks to  
          provide assurance to persons who utilize an LRS that information  
          provided to the employee to obtain a proper referral or other  
          services, shall be maintained as confidential and inadmissible  
          as evidence, except as otherwise provided.  

          3.    The policy goals of a privilege must be sufficiently  
            important to outweigh the public's right to evidence  

          This bill seeks to codify a new statutory privilege for those  
          confidential communications between an LRS and a person seeking  
          referral to a lawyer.  As a general matter, privileges function  
          to exclude evidence, no matter how relevant or reliable that  
          evidence might be, in order to promote some other extrinsic  
          policy.  Because they tend to suppress otherwise relevant  
          evidence, the statutory privileges are strictly construed and in  
          California, unlike under federal law, the courts are not free to  
          create new privileges as a matter of judicial policy; they may  
          only apply those privileges created by statute or those that  
                                                                      



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          arise out of state or federal constitutional law.  (Evid. Code  
          Sec. 911; Sullivan v. Superior Court (Spingola) 29 Cal.App.3rd  
          64 (1972).)  

          As noted in the Background, privileges are policy-based  
          exclusions that are granted because it is considered more  
          important to keep that information confidential than it is to  
          require disclosure of all the information relevant to the issues  
          in a pending proceeding.  Thus, the central consideration is  
          whether or not the policy promoted by the privilege outweighs  
          the public's right to truth in evidence.  

              a.   Ensuring confidentiality of information shared with an  
               LRS
           
            This bill seeks to protect the confidentiality of certain  
                                                                                     communications made when a person consults an LRS for referral  
            to an attorney (or other appropriate services) for his or her  
            problems.  While the public does have a right to all evidence,  
            in codifying a lawyer client privilege, this Legislature has  
            previously judged that the importance of ensuring people  
            obtain effective legal aid to protect their legal rights may  
            outweigh that interest.  Similarly, lawyer referral services  
            can function as an integral part of obtaining appropriate  
            legal services for some consumers.  (See Comment 2.)  

            Though it is unclear whether lawyer referral services are  
            currently underused or rendered ineffective due to persons not  
            feeling free to communicate openly with lawyer referral  
            services, or whether these services have been subject to  
            discovery requests, the proponents of this bill maintain that  
            the gap in existing law with respect to these services has a  
            chilling effect on communications between an LRS and clients  
            and ought to be addressed.  The Conference of California Bar  
            Associations (CCBA), sponsor of this bill, explains that:
             
               Under current California law, a prospective client who  
               consults a lawyer has the freedom to be completely candid,  
               because everything he or she reveals to the lawyer with the  
               intention it be kept confidential is privileged; it cannot  
               be revealed by the attorney-even to a court-without the  
               client's authorization, and it cannot be discovered in  
               litigation.  But the prospective client does not have the  
               same freedom to candidly discuss his or her problem with a  
               lawyer referral service in an effort to obtain a lawyer,  
               because there is no specific statutory privilege for  
                                                                      



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               information provided by a prospective client to a LRS  
               employee.  The confidentiality of the information may be  
               protected under various interpretations of the  
               attorney-client privilege statutes[, b]ut no one currently  
               knows for sure, and this uncertainty and risk has had a  
               chilling effect on communications between prospective  
               clients and lawyer referral services.  (Emphasis in  
               original, footnote omitted.) 

            As acknowledged in the CCBA's letter, a communication made  
            between a client and an LRS employee could potentially be  
            protected under the umbrella of the existing attorney-client  
            privilege, as the employee may be a person "to whom disclosure  
            is reasonably necessary for the accomplishment of the purpose  
            for which the lawyer is consulted."  (Evid. Code Sec. 952; see  
            also, Evid. Code Sec. 912(d).)  However, because it is unclear  
            if courts would agree with that argument if presented with the  
            issue, the uncertainty could feasibly cause some parties to  
            hesitate to use these services, and potentially result in some  
            parties not receiving the legal assistance of an attorney when  
            needed.

            Therefore, to the extent that existing statutory and case law  
            is silent on this specific issue, a limited privilege is  
            arguably appropriate to assure the public of the  
            confidentiality of these services and to encourage them to  
            obtain necessary legal assistance.   Pursuant to this bill,  
            the client, as the holder of the privilege, could claim the  
            privilege to refuse disclosure or prevent any other person  
            from disclosing those confidential communications.   The LRS  
            would also be authorized to claim the privilege and would be  
            required to do unless otherwise permitted by the client. 

              b.   This bill largely models the existing lawyer-client  
               privilege and its limits  

            It should be noted that evidentiary privileges have been  
            carefully limited to balance the need for confidentiality with  
            the fundamental right of the public to evidence.  To this end,  
            existing law outlines both situations in which no privilege  
            applies at all, and circumstances in which an otherwise valid  
            claim of privilege will be deemed waived.  Additionally,  
            certain other elements, such as the definitions provided for  
            "the holder of the privilege" and for "confidential  
            communication," serve as inherent limits on a privilege as  
            well.  As a result, not just anyone is authorized to claim or  
                                                                      



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            waive the privilege, and not all communications are considered  
            confidential.  In establishing an LRS-client privilege, this  
            bill largely models the lawyer client privilege, including  
            limits to that privilege.  

            For example, under existing law, there is no lawyer-client  
            privilege where either the services of the lawyer were sought  
            or obtained to enable or aid anyone to commit or plan to  
            commit a crime or a fraud, or the lawyer reasonably believes  
            that disclosure of any confidential communication relating to  
            representation of a client is necessary to prevent a criminal  
            act that the lawyer reasonably believes is likely to result in  
            the death of, or substantial bodily harm to, an individual.    
            This bill would apply those same exceptions for the proposed  
            LRS-client privilege.  

            Similarly, the term "confidential communication between client  
            and lawyer" is defined under existing law as the information  
            transmitted between a client and his or her lawyer in the  
            course of that relationship and in confidence by a means that,  
            so far as the client is aware, does not disclose the  
            information to third persons other than those who are present  
            to further the interest of the client in the consultation or  
            those to whom disclosure is reasonably necessary for the  
            transmission of the information or the accomplishment of the  
            purpose for which the lawyer is consulted.  In other words,  
            communications made in an open elevator full of third parties  
            would not be privileged, nor would communications that are  
            irrelevant to the purpose for which the lawyer is consulted.   
            This bill would similarly track that definition, among others,  
            thereby ensuring that the proposed privilege would also  
            operate in a limited fashion. 

          4.    Chaptering-out issues 
           
          Staff notes that AB 729 (Hernandez), relating to evidentiary  
          privileges, would amend a section amended by this bill and  
          language must be added to the bill before it leaves the Senate  
          to avoid any chaptering-out of this bill's provisions.


           Support  :  Alameda County Bar Association; Bar Association of San  
          Francisco; California Advocates for Nursing Home Reform; Legal  
          Aid Association of California

           Opposition  :  None Known 
                                                                      



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                                        HISTORY
           
           Source  :  Conference of California Bar Associations

           Related Pending Legislation  :  AB 729 (Hernandez, 2013) would  
          establish a union agent-represented worker privilege.  This bill  
          passed the Assembly Floor by a vote of 52-22.

          Prior Legislation  :  None Known

           Prior Vote  :

          Assembly Floor (Ayes 56, Noes 20) 
          Assembly Judiciary Committee (Ayes 8, Noes 1)

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