BILL ANALYSIS Ó
AB 285
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Date of Hearing: April 21, 2015
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 285
(Gallagher) - As Amended March 26, 2015
As Proposed to be Amended
SUBJECT: LEGAL DOCUMENT ASSISTANTS
KEY ISSUE: IN ORDER TO REDUCE OPERATING COSTS ASSOCIATED WITH
REGULAR REPLACEMENT OF THEIR PRINTED MATERIALS, SHOULD LEgal
document assistants be PERMITTED TO DO THE FOLLOWING: (1) OMIT
THEIR REGISTRATION EXPIRATION DATE FROM APPEARING on all PRINTED
WORK-RELATED PAPERS AND DOCUMENTS, except a contract for
services; and (2) keep the same county-issued registration
number, even after THEIR REGISTRATION lapseS or IS NOT RENEWED?
SYNOPSIS
Legal document assistants (LDAs) provide legal document
preparation and self-help services to the public within
parameters established under consumer protection legislation
established in the early 1990's. Under existing law, LDAs may
not provide any self-help service for compensation unless
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registered in the county of his or her principal place of
business, and any other county in which he or she serves
clients. The types of services that LDAs are authorized to
perform include: (1) completing legal documents in a ministerial
manner, selected by a self-represented person, by typing or
otherwise completing the documents at the person's specific
direction; (2) making published legal documents available to a
person who is representing himself or herself in a legal matter;
and (3) filing and serving legal forms and documents at the
specific direction of a person who is representing himself or
herself in a legal matter.
This bill, sponsored by the California Association of Legal
Document Assistants (CALDA), seeks modest changes to laws
regarding the registration of legal document assistants,
particularly disclosure rules that require LDAs to display
certain registration information on all of their business
materials and documents. First, the bill repeals the
requirement that a registered LDA must display the expiration
date of his or her registration on printed solicitation, papers,
documents, and other printed materials, with exception of the
written contract for services that must be provided to each
client. As proposed to be amended, the bill limits the
disclosure exemption for the expiration date to only printed
materials and clarifies that LDAs must still disclose their
registration expiration date on the written contract for
services, as well as on any Internet website maintained by the
LDA and documents, correspondence or materials that are in
electronic rather than printed form. Second, the bill would
allow LDAs to keep the same registration number after periods of
non-renewal. Proponents, including the National Federation of
Independent Businesses (NFIB), contend that both changes are
needed to reduce unnecessary cost burdens on LDAs, namely, by
forcing them to regularly purchase new written materials and
discard old materials whenever an expiration date or
registration number changes. Additional author's amendments
reduce the scope of the bill in response to Committee concerns
that the removed provisions unacceptably reduced consumer
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protections in current law. This bill has no registered
opposition and will be referred to the Assembly Local Government
Committee upon approval by this Committee.
SUMMARY: Makes modest changes to rules governing the use of
registration information of legal document assistants (LDA).
Specifically, this bill:
1)Provides that the expiration date of an LDA's registration
need not appear in printed solicitations or advertisements,
nor on printed papers or documents prepared or used by the
registered LDA, including but not limited to, contracts,
letterhead, business cards, correspondence, documents, forms,
claims, petitions, checks, receipts, and pleadings.
2)Provides that the registered LDA's name, business address,
telephone number, registration number, expiration date of the
registration, and county of registration shall appear on the
written contract required to be given to every client prior to
providing services, as well as on any Internet website
maintained by the registrant and in any solicitation,
advertisement, document, or correspondence prepared or used by
the registrant in electronic form.
3)Requires the county clerk, upon renewal of registration, to
assign the LDA the same registration number previously issued,
including in instances where renewal is sought after a lapse
in registration.
EXISTING LAW:
1)Prohibits any LDA, including any LDA employed by a partnership
or corporation, from providing any self-help service for
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compensation, unless the LDA is registered in the county in
which his or her principal place of business is located and in
any other county in which he or she performs acts for which
registration is required. (Business & Professions Code
6400(f). All further references are to this code unless
otherwise stated.)
2)Requires a LDA or unlawful detainer assistant (UDA) to
register with the county clerk in the county in which his or
her principal place of business is located (deemed primary
registration), and in any other county in which he or she
performs acts for which registration is required (deemed
secondary registration). Provides that any registration in a
county, other than the county of the person's place of
business, shall state the person's principal place of business
and provide proof that the registrant has satisfied specified
bonding requirements. (Section 6402.)
3)Requires an applicant to pay a fee of $175 to the county clerk
at the time he or she files an application for initial
registration, including a primary or secondary registration,
or renewal of registration. (Section 6404.)
4)Requires an individual applicant to post a bond of $25,000,
and any partnership or corporation applying for registration
to post a bond of $25,000 for one to four assistants, $50,000
for five to nine assistants, and $100,000 for ten or more
assistants. (Section 6505.)
5)Provides that a certificate of registration shall be effective
for a period of two years, and requires the county clerk to
deny registration or renewal of registration if the applicant
has been convicted of specified crimes, has been found guilty
of the unauthorized practice of law, has been held civilly
liable for certain misconduct, or has had his registration
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previously revoked, as provided. (Section 6406.)
6)Requires the county clerk to maintain a register of LDAs and
UDAs, assign a unique number to each LDA or UDA, and issue an
identification card to each one. Provides that upon renewal of
registration, the same number shall be assigned, provided
there is no lapse in the period of registration. (Section
6407.)
7)Requires the registrant's name, business address, telephone
number, registration number, expiration date of the
registration, and county of registration to appear in any
solicitation or advertisement, and on any papers or documents
prepared or used by the registrant, including, but not limited
to, contracts, letterhead, business cards, correspondence,
documents, forms, claims, petitions, checks, receipts, money
orders, and pleadings. (Section 6408.)
8)Requires every LDA or UDA who enters into a contract or
agreement with a client, prior to providing any services, to
provide the client with a written contract that meets certain
criteria and contains specified statements and disclaimers.
(Section 6410.)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: This bill, sponsored by the California Association of
Legal Document Assistants (CALDA), seeks modest changes to laws
regarding the registration of legal document assistants,
particularly disclosure rules that require LDAs to print certain
registration information on all documents and materials they use
in the ordinary course of business. First, the bill repeals the
requirement that a registered LDA must display the expiration
date of his or her registration on printed solicitation, papers,
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documents, and other printed materials, with exception of the
written contract for services that must be provided to each
client. As proposed to be amended, the bill preserves the
requirement to disclose the registration expiration date with
respect to appearing on the LDA's website and other papers and
documents used by the LDA in electronic form, where technology
allows materials to be easily updated without having to discard
or reprint entire new batches of business materials.
Background on Legal Document Assistants. Chapter 5.5 of
Division 3 of the Business and Professions Code (commencing with
Section 6400) ("Chapter 5.5") regulates both legal document
assistants (LDA) and unlawful detainer assistants (UDA).
Although they are defined separately in statute, the two groups
are subject to the same registration and oversight structure
provided under Chapter 5.5, and unless otherwise stated, will be
discussed interchangeably in this analysis.
Generally speaking, LDAs provide legal document preparation and
self-help services to the public within parameters established
under the Chapter. LDAs may not provide any self-help service
for compensation unless registered in the county of his or her
principal place of business, and any other county in which he or
she serves clients. The term "self-help services" defines the
activities that registered LDAs are specifically authorized to
perform, namely: (1) completing legal documents in a
ministerial manner, selected by a self-represented person, by
typing or otherwise completing the documents at the person's
specific direction; (2) providing general published factual
information that has been written or approved by an attorney,
pertaining to legal procedures, rights, or obligations to a
person who is representing himself or herself in a legal matter,
to assist the person in self-representation; (3) making
published legal documents available to a person who is
representing himself or herself in a legal matter; and (4)
filing and serving legal forms and documents at the specific
direction of a person who is representing himself or herself in
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a legal matter.
At its core, Chapter 5.5 is a consumer protection statute, first
enacted in the early 1990s in response to an epidemic of fraud
perpetrated upon vulnerable consumers by non-lawyers who offered
legal document preparation and other services for a fee.
Because the statute was intended to deter bad actors and stop
the spread of acts that were largely presumed to be part of a
scheme to commit fraud, Chapter 5.5 contains a number of
provisions that by today's standards may seem unnecessarily
strict and burdensome, at least to LDAs who now operate in a
more legitimate environment. It is important to note, however,
that the Legislature previously evaluated the statute and
determined that its "existing enforcement mechanisms are at
least minimally sufficient to provide the necessary consumer
protection." (See Professor J. Clark Kelso (McGeorge School of
Law), An Assessment of the Legal Document Assistant Pilot
Project (May 2002).) Consequently, efforts to update the
statute should be evaluated not only with respect to their
impact on registered LDAs, but also in regard to any impact on
the balance of consumer protection that has been achieved in
this area when the LDA pilot program statute was first enacted
over 20 years ago, and later made permanent in 2002 (in what is
largely its current form).
Author's amendment: Publication of registration expiration date.
Under existing law, LDAs are required to disclose their
registration information, business address, telephone number,
and registration expiration date on all business materials, such
as sales brochures, forms, ink stamps, and checks. According to
the author and sponsor (proponents), inclusion of the expiration
date on all materials used by the LDA (checks, ink stamps,
brochures, and other such collateral) is unduly burdensome and
cost prohibitive to LDAs because those materials must be thrown
out and repurchased at every renewal once they show the expired
registration date. Proponents contend that it is reasonable to
continue to mandate that other registration information be
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provided on work materials, but it is not necessary to require
the registration expiration date on materials, as long as the
expiration date appears on the written contract for services
that is required to be provided to every client of the LDA.
As currently in print, the bill would exempt the registration
expiration date from appearing on any LDA work materials, except
for the client contract for services, as well as from appearing
on the LDA's Internet website. Because exempting the expiration
date from appearing on the LDA's website is not necessary to
achieve the stated purpose of relieving cost burdens associated
with discarding and reprinting written materials, the author
proposes to amend the bill to limit the proposed disclosure
exemption for the expiration date to only printed materials. As
proposed to be amended, the bill clarifies that LDAs must still
disclose their registration expiration date on the written
contract for services, as well as on any Internet website
maintained by the LDA, as well as any documents, correspondence
or materials that are in electronic, rather than printed, form.
The amendment is:
On page 12, line 6, strike "Internet Web site" and after
"any" insert "printed"
On page 12, line 13, after "Section 6410" insert "as well
as on any Internet website maintained by the registrant and
in any solicitation, advertisement, document, or
correspondence prepared or used by the registrant in
electronic form"
Because much of the correspondence, advertisement, and
preparation done by LDAs now occurs through use of the Internet
or use of electronic documents, many (but admittedly not all)
prospective consumers should still be made aware of the LDA's
registration expiration date under these proposed amendments.
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Also, the bill ensures that all LDA clients who are offered a
contract for services will receive disclosure of the expiration
date because the date will be required to be printed on the
mandatory written contract.
Assignment of the same registration number. Section 6407(a)
requires the county clerk, upon renewal of registration, to
assign a new registration number to the LDA if the renewal is
late or registration has for some reason lapsed, even if the
period of non-renewal is entirely voluntary. According to
proponents, requiring the issuance of a new registration number
is unduly burdensome and serves only to increase costs by
forcing LDAs to reorder stamps, stationary, business cards, and
other promotional materials to reflect the new number. This
bill would simply require the county clerk, upon renewal of
registration, to assign the same registration number, including
in instances where renewal is sought after a lapse in
registration.
Proponents contend this change would bring this provision more
closely in line with professions like engineers, lawyers,
contractors, real estate agents, accountants and tax preparers,
who maintain their original assigned registration numbers even
when renewing after a voluntary period of non-practice. They
also contend that assignment of multiple registration numbers to
one registered LDA may mislead the public as to how long that
registrant has been practicing in the profession. Committee
staff also notes that this change may help protect consumers by
making it easier to track the history of individual LDAs should
the need arise to investigate any case of alleged misconduct.
Author's amendments reduce scope of the bill. As currently in
print, the bill seeks to extend the length of the registration
term for LDAs from two to four years, and to allow LDAs to
provide services statewide without having to register in every
county in which they provide services, as is required by current
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law. In order to address concerns expressed by the Committee
that the bill simply seeks to reduce existing consumer
protections provided by the current registration scheme without
proposing any alternative measures to continue to protect
consumers, the author has proposed to amend the bill to remove
those provisions at this time. The amendments are:
Strike page 3, lines 1 to 17; strike pages 4 to 10
inclusive; strike page 11, lines 1 to 16.
On page 11, line 17, strike "SEC. 7" and insert "SEC. 1"
On page 12, line 1, strike "SEC. 8" and insert "SEC. 2"
On page 12, line 14, strike "SEC. 9" and insert "SEC. 3"
Previous related legislation. AB 1573 (Burton) Ch. 1011, Stats.
1993, first established registration, bonding requirements, and
further regulation for so-called "unlawful detainer assistants"
in order to protect consumers from documented cases of scamming
activity involving the unauthorized practice of law in the field
of eviction defense.
SB 1418 (Rosenthal) Ch. 1079, Stats. 1998, subsequently
established registration, bonding requirements, and regulation
of "legal document assistants."
AB 2810 (Pacheco) Ch. 386, Stats. 2000, required legal document
assistants and unlawful detainer assistants to only post a
single multi-county bond of $25,000, instead of posting such a
bond in every county in which the LDA or UDA does business.
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AB 1698 (Committee on Judiciary) Ch. 1018, Stats. 2002, repealed
the sunset date for the Legal Document Assistant Pilot Project,
and established new regulations for LDAs.
REGISTERED SUPPORT / OPPOSITION:
Support
California Association of Legal Document Assistants (sponsor)
National Federation of Independent Business
Responsive Law
Over 40 individual and small business LDAs
Opposition
None on file
Analysis Prepared by:Anthony Lew / JUD. / (916) 319-2334
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