Friday, May 13, 2011

Video of oral argument on sanctions and other interesting issues

The Illinois Supreme Court just heard oral arguments in a case where the administrator of the state's disciplinary authority is appealing a ruling arguing that the sanctions imposed in a particular case were too lenient.  You can watch the video by going here, or, if you prefer just the audio, you can go here.  Surprisingly, the attorney facing the sanctions represents himself!

The case (In re Mulroe), is about an attorney who mishandled a client's money.  To make a long story short, he deposited it into one account, then moved it around into other accounts and eventually took too long to repay it.  He apparently had very sloppy accounting of the money in all his accounts and was guilty of commingling at the very least. It sounds like he had a number of accounts, kept money in all of them and moved the money around using it for whatever he needed to use it at the time.  He claimed he always had enough money, but that was adding the funds in all his accounts at any given time.

The disciplinary authority found the attorney had violated the rules and imposed sanctions but also found that the conduct was not "dishonest" - that it was the result of sloppy bookkeeping rather than of intent to convert the client's funds.  The administrator appealed arguing the sanctions should more severe because the conduct should be considered to be dishonest.  In fact, he argued the conduct was the equivalent of misappropriation.  The administrator argued that the lawyer engaged in a willful violation of the fiduciary duty to maintain client's funds properly.

Interestingly, the controversy seems to revolve around whether the conduct was "dishonest."  In my opinion, however, the better way to approach the issue would be to adopt the view of the ABA Standards for Sanctions which is based not on a value judgment of the character of the conduct but on the “mental states” of the lawyer who engaged in it. 

The ABA Standards recognize three different mental states: intent, knowledge and negligence.  In this case, the administrator is arguing that the attorney acted with "knowledge" while the attorney argues he was merely negligent. 

If you listen to the argument you will hear how at one point the discussion seems to be heading that way, although by raising another alternative mental state: "recklessness."  One of the justices asks the attorney point blank if the conduct does not show that he was reckless which makes the attorney look very uncomfortable.

I have always had a problem with the term recklessness (particularly in torts) because it can only be defined as either a high degree of negligence or as disregard for the consequences of the conduct.  If it is the former, it is negligence; if it is the latter, it is knowledge.  So I am afraid "recklessness" adds nothing but confusion to the issue.

The oral argument is long (almost one hour), but it is worth watching.

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