MALPRACTICE ALERT! FALL 2022

Amendments to the Supreme Court Rules for attorneys and judges governing continuing legal education (CLE) that remove the self-study cap become effective January 1, 2023.  The temporary waiver allowed during the pandemic is now permanent.

This change means that attorneys can now complete all 24 hours of CLE required for the biennial compliance by taking approved self-study courses.  Judicial officers will be permitted to take 20 hours of self-study courses for the 40 hours required for the two-year judicial compliance period.

The Office of Attorney Services suggests confirming that the self-study courses are properly accredited prior to attending the self-study CLE. For additional information see CLE FAQs.

Proposed amendments to the Rules of Superintendence for the Courts of Ohio would affect forms for Probate Courts in Ohio. Proposed Form 13.11 Application to Disburse Attorney Decedent’s Trust Accounts is a new form that would allow an attorney to request that the trust accounts of a deceased attorney be disbursed by the financial institutions to the attorney submitting the application to distribute in accordance with the Rules for the Government of the Bar and the Rules of Professional Conduct. Currently, there is no procedure to access the trust account of a deceased attorney.

The remaining changes are proposed regarding the forms for Application for Change of Name and for Application to Settle a Minor’s Claim.

On August 12, 2022 the first public comment period closed on the Ohio Supreme Court’s proposed Case Inquiry Request webform. The form was developed by the Supreme Court to assist lawyers and parties in cases who are trying to determine the reasons for delays in local court cases. If adopted, inquiries made through the use of the form would be kept confidential.

A recent report of the Task Force on Conviction Integrity and Postconviction Review recommended several changes to rules and statutes aimed at improving conviction integrity and the postconviction review process. These include adoption of a new Crim.R. 33.1 and amendments to Prof.Cond.R. 3.8. The new Crim.R. 33.1 would establish that a new trial may be granted based on relevant, admissible evidence not proffered at trial which, if considered at a new trial, would result in a reasonable likelihood of acquittal. The amendments to Prof.Cond.R. 3.8 would impose additional responsibilities upon prosecutors who become aware of previously undisclosed, credible, material evidence creating a reasonable likelihood that a convicted defendant is not guilty or clear and convincing evidence that a defendant is innocent.

The Ohio Board of Professional Conduct recently issued Opinion 2022-07 Lawyer Accepting and Holding Cryptocurrency in Escrow.  The Opinion only addressed the issue of the receipt of cryptocurrency to be held in escrow by a lawyer, and did not address cryptocurrency as payment of a lawyer’s fees.

The Opinion examined whether a lawyer may accept and hold cryptocurrency in escrow for clients and third parties. A lawyer is unable to place cryptocurrency in a trust account because financial institutions do not accept or exchange cryptocurrency.

The Opinion discussed that the Internal Revenue Service treats cryptocurrency as property and not as monetary funds. See Notice 2014-21.  Unless the cryptocurrency is converted into U.S. funds upon receipt by the lawyer, it cannot be deposited in an IOLTA. Because cryptocurrency is treated as property, it may be held by a lawyer for clients or third persons in connection with a representation or law related business.

It is recommended that the lawyer maintain separate records that document all exchanges or other dispositions of cryptocurrency and the value of the cryptocurrency at the time of each transfer or disposition. The lawyer must keep records related to the holding of cryptocurrency for seven years after disposition as required by Prof.Cond.R. 1.15(a).

The Opinion also emphasized the importance of technological competency for lawyers involved with cryptocurrency. Further, a lawyer should require a detailed written escrow agreement that identifies the parties to the transaction and the underlying transaction for which the escrow account will be used to prevent unknowingly assisting in illegal activity by persons engaging in money laundering or other fraud.

It is not uncommon for clients who have been injured and face protracted litigation to be seduced by offers to “get money now” through third-party litigation funding. However, lawyers must review these offers closely and remember their ethical obligations when a client is considering one. In Advisory Opinion 2012-3, the Ohio Board of Professional Conduct offered the following advice:

• The lawyer must provide sufficient information on the risks and benefits of a non-recourse civil litigation contract.
• The lawyer should be prepared to make a recommendation as to whether the contract is in the client’s best interest.
• The contract review must include a frank discussion about the contract terms and the true cost of the advance and make the client aware that the contract may create an incentive for the client to accept a premature or inadequate offer of settlement.
• The lawyer must avoid becoming an active participant in the transaction itself.
• The lawyer must discuss with the client the duty of independent professional judgment and guard against the third-party exerting improper influence on the lawyer or the client.
• The lawyer must scrutinize the statutory acknowledgment that the lender must have the lawyer sign and only execute it if it complies with the statute and is accurate to the representation.
• The lawyer must secure the client’s informed consent before identifying the client or providing any information to the third-party providing the funding.

In addition to the ethical considerations, there are practical considerations that the lawyer should be aware of as well. The lawyer will need to keep track of these litigation advances and the growing balance over the life of the case to properly advise the client on how to respond to settlement offers. Interest rates on these contracts are typically quite high and could significantly reduce the client’s recovery if the time to resolution is long.

Lawyers with clients considering non-recourse civil litigation contracts, should review the following:

• R.C. 1349.55 Non-recourse civil litigation advance contracts;
• Ohio Board of Professional Conduct Opinion 2012-3: Non-recourse Civil Litigation Advance Contracts: Guidance for Ohio Lawyers
• American Bar Association Best Practices for Third-Party Litigation Funding.
• Estate of Campbell v. US Claims OPO, LLC, 2022-Ohio-711

OBLIC has warned about phishing attacks that can compromise IT systems. Phishing is a type of social engineering used by hackers sending a fraudulent message to trick a person into revealing sensitive information or deploy malicious software. See Cyber Toolbox Article Spotlight.

The Cybersecurity & Infrastructure Security Agency (CISA) reported that over 90% of successful cyberattacks start with a phishing email. When phishing attacks use text messages it’s called smishing.  These attacks are on the rise. Here’s another reminder of the best practices to avoid becoming a victim of a smishing attack:

• Train everyone in the office – lawyers and support staff – to verify any requests for information and be on the lookout for unexpected emails or texts with spelling or grammar errors.
• Watch for spoofed app names, faked domain names and false email addresses
• Implement MFA (multifactor authorization) to access email, systems and devices
• Use filters to capture suspicious emails
• Don’t allow access to unsecure websites.

The American Bar Association has recommended that law firms have a comprehensive cybersecurity program. Click for additional information on the recommended basic safeguards.