A group of California trial lawyers is backing a package of bills aimed at policing their industry by including penalties for lawyers who illegally hire clients or prioritize the interests of hedge fund investors.
The Consumer Attorneys of California, a prominent trade group, said it is supporting two bills this season aimed at eliminating “a small number of perpetrators who engage in illegal activities that threaten to undermine public trust” in the state’s legal bar.
The group said the bills, introduced Monday by Assemblymembers Ash Kalra (D-San José) and Rick Chavez Zbur (D-Los Angeles), were in response to a recent Times investigation involving California lawmakers. The Times has acquired nine clients within LA County worth billions of dollars correction of sexual abuse who say they are paid to sue and, in some cases, make up claims that was part of the historic charge. Considered another matter opaque financial funds programs used by other companies.
“We’re not trying to make ourselves unaccountable,” Douglas Saeltzer, president of the advocacy group, said in an interview. “There must be consequences.”
The bill introduced by Zbur would disbar any lawyer convicted of soliciting clients illegally. Kalra’s bill would prevent private equity firms and hedge funds from deciding litigation strategy after giving money to a law firm.
The plaintiff’s lawyers say that pushing the law is an attempt to clean up the reputation of their profession. It comes amid efforts by companies and governments that are often targeted by lawsuits to crack down on dozens of cases.
Uber is pushing a average with a November vote that would limit the amount attorneys can collect in fees for auto collision cases, urging Californians to “stop the billboard attorney scam.” A coalition of California states at the same time has begun circulating language to lawmakers that would limit the ability of attorneys to prosecute old sexual assault cases, pointing to recent fraud allegations.
The law of Zbur, Assembly Bill 2039would require the State Bar to revoke the license of any attorney with a felony conviction in a practice known as capping, in which law firms directly solicit or buy clients to sign up for lawsuits. Currently, attorneys convicted of violating the law may face suspension or probation, but are eligible to retain their licenses.
Under the bill, a lawyer would also be barred from a misdemeanor conviction if the lawyer “acted intentionally and for pecuniary gain.”
“It’s very clear that if you participate in this type of capping, there will be a consequence,” Zbur said.
All clients who claim to have been paid to sue LA County for sexual harassment were represented by Downtown LA Law Group, one of Southern California’s largest personal injury firms. The company, also known as DTLA, is under investigation by the region a lawyeri District Bar again LA County.
DTLA has denied wrongdoing and said its attorneys “act with unwavering integrity, putting the welfare of clients first.”
Zbur’s bill would also provide whistleblower protection for people who report attorney misconduct and tighten rules on client lending. California is one of the few states where attorneys can lend money directly to clients.
Some states have banned the practice, concerned that direct lending gives attorneys too much power over their clients.
A second bill was introduced on Monday, AB 2305it is aimed at the growing number of private equity firms and hedge funds that lend money to law firms and profit from the fees. The Times reported that in December investors were financing some of the flood of sexual assault lawsuits against LA County.
Proponents of lawsuit funding say it gives lawyers the money they need to take on deep-pocketed corporations and represent victims who can’t sue. Critics say investors can use the litigation strategy in private, putting their own profits ahead of the client’s best interests.
“These Wall Street investors are salivating,” Kalra said. “This will clearly say, ‘No, no more. We will not allow these types of investments to affect the operation of the law.’
Kalra’s bill would prevent investors from meddling in litigation matters, such as who a company should take as a customer and when it should close a lawsuit. Any contracts that allow influencing investors will be void under the law.
It is unclear how the restrictions will be enforced. It is often difficult to tell when an investor is funding a company’s caseload, let alone having an impact on the case.
Attorneys are already prohibited under State Bar rules from allowing a third party to decide litigation strategy and in many cases are prohibited from sharing legal fees with a non-attorney.
“We find that is not enough,” said Kalra. “We really need clear legal protections.”
