Illinois legislature rejects proposal to regulate litigation financing companies

Last November, I reported that the Illinois legislature was set to discuss Senate Bill 3322 which attempted to regulate entities that lend money to litigants in exchange for an assignment of an amount of the potential proceeds of the litigants' legal action. This coinicided with an article on the subject in the New York Times (See here.) and an interesting discussion of the legal and ethical issues that relate to the litigation loan industry in Room for Debate, the Legal Ethics Forum and The Wall Street Journal Law Blog.

The proposed legislation in Illinois was defeated today, though. The Chicago Daily Bulletin is reporting that Senate Bill 3322 failed to get the support it needed to make it out of this year's veto session. Rep. Louis I. Lang is quoted as saying that the funding entities now "will be able to charge 1,000 percent interest. They can do anything they want. No consumer protections at all."

The civil litigation funding industry has been providing its services in Illinois for more than a decade without regulation. Here are the highlights of the failed proposed legislation

-- legal funding companies would be required to be licensed by, and to give annual reports to, the Illinois Department of Financial and Professional Regulation

-- lenders would be required to provide plaintiffs with a detailed contract and a five-day window to cancel their contract

-- there would be criminal and civil penalties for individuals who engage in the business of legal funding without a license.

-- the interest rate on loans would be capped. Illinois would have been the first state to enact such a cap.

According to the article, it is unlikely the proposal will be presented again.

ABA Supports Right to Counsel for Civil Contempt Defendants

Back in November I reported that the Supreme Court had granted cert on a case called Turner v. Price which asks whether an indigent defendant has a constitutional right to appointed counsel at a civil contempt proceeding that can result in his incarceration.

Today, the ABA Journal.com is reporting that the ABA has filed an amicus brief in the case in which it argues that poor people should have the right to a lawyer in civil contempt proceedings carrying a threat of jail time. Go here for the full story. Go to SCOTUS blog for links to the brief and all other documents related to the case, including the lower court's opinion.

"E-discovery" has resulted in unprecedented number of sanctions

The Wall Street Journal law blog is reporting today that according to a new study done by King & Spalding and reported in the Duke Law Journal, lawyers are getting sanctioned for electronic-discovery violations at an unprecedented rate. Click here for the study; here for the ABA Journal article report; here for a report from the Catalyst E-Discovery Blog.

Top Ten stories of 2010

The Legal Ethics Forum has posted its "top ten stories of 2010" list here, with links to the lists from past years also. Here are the headlines, but go to their post for the details and links to more information.

1. Congress, the Supreme Court, the First Amendment, and Lawyering.

2. Padilla v. Kentucky.

3. Resolution of the Torture Memos Discpline.

4. The Internet and Lawyering.

5. Advertising and Free Speech.

6. The Clinics Strike Back.

7. New Rules for the Golden State?

8. The Continuing Battle Over Funding of Public Defenders.

9. Litigation Funding.

10. The BP Oil Spill.

Information given to someone thought to be an attorney not in good standing is still privileged

Back in June of last year, I wrote about a case in which a federal court magistrate in New York has decided that information shared with someone the client mistakenly thought was a licensed lawyer was not protected by the attorney/client privilege. See here and here.

I criticized the decision arguing that if the client really did not know of the attorney's inactive status, the client should be given the benefit of the privilege.

Yesterday, the Legal Ethics Forum reported that the decision has been overturned. See here.

The text of the opinion is available here.

The Supreme Court grants two cases on ineffective assistance of counsel

The Supreme Court announced today it has granted review in two cases, which involve issues related to the notion of ineffective assistance of counsel. Interestingly, though, the cases will be heard separately. The Court will be deciding whether an individual who rejects a plea offer from prosecutors because of his or her lawyer's advice has a claim for ineffective legal assistance if that advice was either flawed or produced a less favorable outcome than if the individual had gone to trial. Moreover, the Court told counsel in both cases to brief and argue an additional question: “What remedy, if any, should be provided for ineffective assistance of counsel during plea bargain negotiations if the defendant was later convicted and sentenced pursuant to constitutionally adequate procedures?” The cases are called Leflar v. Cooper (10-209) and Missouri v. Frye (10-444). (The links over the names of the cases will take you to the SCOTUSblog page with all the case documents, briefs and opinions.)

New lawyer TV show: Harry's Law

Back in June of last year I posted a preview of three new law related TV shows that were announced for the fall season. One of them (Outlaw) was cancelled after three or four episodes. Thankfully, I may add! It was absolutely terrible. Another one (The Defenders) became my favorite. I have blogged comments on several episodes.

The third one (Harry's Law) did not make it into the fall TV season at all. I was wondering if, having seen the failure of Outlaw, the network had decided to can it even before it got started. But, no, it was only postponed.

I just heard Harry's Law will premiere on January 17. Here is the program's official website. Here is a link to some video previews of the show.

Podcast on e-discovery

Here is a link to a podcast in which the panelists discuss ethical issues in e-discovery including what they believe to be the most common ethical violations in e-discovery and ways to ensure that attorneys comply with their ethical duties with respect to e-discovery. You can also access the program here and here:

Story regarding insurance companies

In class we spend a good deal of time talking about the so-called "insurance triangle," which refers to the issues that arise when a lawyer is paid by an insurance company to represent the insured. Although not really on this topic precisely, here is a link to an interesting story in the product liability defendants oriented blog Drug and Device law blog on how an insurance company's tactics can threaten to turn discovery into a road map for the underlying tort claimants. It concludes that "it is unfortunate – and even more unfortunate that it is hardly unexpected – that some insurance companies engage in tactics that can prejudice their insureds to avoid covering claims."

Minnesota amends rules to allow flat fees

In the past, I have expressed my disagreement with the approach some jurisdictions take on the issue of flat fees (see here and here). Last October, however, I reported that Tennessee rejected the trend when it amended its rules (here).

Now comes news that the Minnesota Supreme Court also got it right, and has amended its Rules of Professional Conduct to allow, with certain notice requirements, an attorney to treat a flat fee as an attorney's property on receipt.

Thanks to the Legal Profession blog for the update.