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How we resolve our disputes

Entries in attorney fees (2)


Why is unauthorized practice of law such a big deal?

Most states have statutes that make it illegal to practice law without a license.  However, until recently, most states did not define what constituted the practice of law.  This made it difficult to prosecute someone for engaging in the unauthorized practice of law (UPL).  In fact, such prosecutions are very rare.  More importantly, people who go to unlicensed practitioners for legal advice have no recourse if that advice turns out to be bad.  If a person is not licensed to practice law, what standard of care do we hold him or her to?

But now, things are changing.  In Florida, the state Supreme Court has ordered the state bar to issue advisory opinions on whether an activity constitutes the practice of law.  In Wisconsin, the state Supreme Court has adopted a rule that defines what UPL is.  But neither state has created any mechanism for enforcing the new rules.  Instead, it will be up to citizens or lawyers to bring private lawsuits against the unlicensed legal advisors.  Presumably, consumers harmed by bad legal advice from an unlicensed person will now be able to collect damages because the rendering of legal advice by a non-lawyer will be negligence per se.  Likewise, licensed attorneys should be able to get injunctions against unlicensed legal advisors, and prosecutors may finally be able to get criminal convictions in appropriate cases.

This is important not only to lawyers.  It is not a battle to preserve their turf and legal fees.  People have been harmed by unlicensed legal advisors who gave bad legal advice, and then they have no legal recourse.  For example, not long ago, I was contacted by someone who wanted me to appeal a case he lost after representing himself pro se with the help of an “independent paralegal.”  No attorney supervised the paralegal.  I turned the case down for numerous reasons having to do with mistakes made by the “paralegal.”  Then I found out the paralegal had charged nothing for his advice.  My would-be client had gotten exactly what he paid for.

In Kierstyn v. Racine Unified School District, a school teacher got bad legal advice from the school district’s employee benefits specialist about how to apply for sick leave and disability insurance benefits.  As a result, she and her husband lost thousands of dollars.  But the court ruled that the school district was immune from being sued because it had no ministerial duty to give correct legal advice.  Now, similar employees and their spouses might be spared such losses because school districts (and employers in general) would have a duty not to give any legal advice.  They should refer such beneficiaries to their own independent legal counsel who would be held to a professional standard of care.

And in Florida, as well as much of the Gulf coast, bar associations are warning people to be alert for non-lawyers who offer to help them fill out claim forms for losses incurred due to the BP oil spill.  Some of those “paralegals” are not independent at all.  They may be working for the oil company and have an inherent conflict of interest.

When legal rights are at stake, when a contract or insurance policy needs to be interpreted, or when you are asked to sign a release or waiver of legal claims, it is not the time to be penny wise and pound foolish.  Make sure your legal advisor is fully educated and licensed.  Only then will you have recourse if the advice you get does not meet a professional standard of care.


Don't forget the attorney fees

We often hear complaints about the high costs of attorneys fees.  So how could anyone negotiating a settlement of a legal dispute forget about them?  Apparently, it happens.  In a recent Wisconsin Court of Appeals decision, the court held that a party who successfully settled a will dispute could not recover attorney fees despite the existence of a statute that provided for an award of attorney fees to a prevailing party in all appealable contested matters.  (In re the estate of Estate of Wolf)  Key to the decision was the fact that a settlement, by definition, is not an “appealable contested matter.”  If the parties agree to settle, neither side prevails and neither is aggrieved.  Therefore, neither side can appeal.  The courts obviously have no interest in inspecting every settlement agreement to determine who “prevailed.” 

Of course, the settlement agreement could have mentioned attorney fees, but it did not.  It would have been a simple matter for the agreement to state whether or not it included attorney fees.  By now, it should be routine for attorneys or mediators to raise that issue in settlement negotiations, especially where a fee-shifting statute arguably applies to the subject matter of the dispute.  In the absence of a provision in a settlement agreement reserving the right to seek attorney fees in court, parties to the settlement naturally expect that the settlement puts an end to the matter.  The moral of this story is that the settlement agreement should specify whether or not it includes attorney fees.