Bench & Bar

JAN 2018

The Bench & Bar magazine is published to provide members of the KBA with information that will increase their knowledge of the law, improve the practice of law, and assist in improving the quality of legal services for the citizenry.

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Page 48 of 75

47 BENCH & BAR | ENDNOTES 1. KBA U-3 ("[A] layman may not represent persons or entities before quasi-ju- dicial bodies." In relation to representation before the Kentucky Department of Motor Transportation.); KBA U-15 (A layman may not represent a claim- ant at a hearing before a referee of the Unemployment Insurance Commission without constituting the unauthorized practice of law.); KBA U-17 ("Appear- ances by non-lawyers representing corporations or individuals before adminis- trative agencies is the practice of law in that it necessarily involves advice and procedures affecting the legal rights and obligations of such parties."); KBA U-27 ("ere can be no doubt that a person who represents a client before the Department of Insurance of the Commonwealth of Kentucky is engaged in the practice of law."); KBA U-52 (Non-lawyers may not represent parties be- fore the Kentucky Department of Workers' Claims.); KBA U-56 (e appear- ance of an individual, not licensed as an attorney, before the Kentucky Natural Resources and Environmental Protection Cabinet on behalf of a third person, corporation or another entity, at a penalty assessment conference, constitutes the unauthorized practice of law.). See also Kentucky State Bar Assn v. Henry Vogt Machine Co., 416 S.W.2d 727 (Ky. 1967), where the Kentucky Supreme Court enjoined non-attorneys from making legal objections and examining witnesses in hearings before the Unemployment Insurance Commission. 2. ere is ample support for this understanding to be found in past KBA opin- ions and Kentucky jurisprudence in relation to other similar standardized pro- cesses that fit into a similar mold. In KBA U-37 it was determined, with the guidance of the Kentucky Supreme Court, that an individual non-attorney, could not properly prepare and file Petitions, Orders and various documents in District Court on behalf of an estate, without the assistance of an attorney: e central rule of the Carter case was that preparing and filing peti- tions for probate of wills, appointment of personal representative and final settlements is unauthorized practice of law when done voluntarily by persons without a beneficial interest in the estate. See also Winken- hofer v. Chaney, Ky., 369 S.W.2d 113 (1963). Fiduciaries are in no dif- ferent position, with respect to the practice of law, than the County Court Clerk in the Carter case. Moreover, in KBA U-57 it was determined, with guidance from the Kentucky Supreme Court, that a lay individual licensed in Kentucky as a "public adjuster" under KRS 304.9-430, and 806 KAR 9:030, who is not a licensed attorney, could not represent claimants in the handling and processing of claims against tortfeasors and/or their insurers at any stage of the process: e public adjuster must initially consult with the claimant regarding who[m] to pursue, which requires an analysis of legal liability. Garner- ing proof of damages requires knowledge of confidentiality, evidentiary matters and remedies. e entire matter must be handled with an acute awareness of statutes of limitations. e effect of admissions against interest, contractual rights, and waiver of claims for consortium, issues of third party liability, product liability, and commercial and consumer protection matters all must be examined. It is clear that the attempt by a layperson licensed as "public adjuster" to represent claimants in tort cases is the unauthorized practice of law. See KBA U-45; See Kentucky State Bar Association v. Lakes, Ky., 443 S.W.2d 248 (1969). 3. KBA U-4 (Procuring, analyzing and evaluating claims history for an employer by a non-attorney is the unauthorized practice of law.); KBA U-48 (An insur- ance adjuster, claiming authority under KRS 304.9-070 and KRS 304.9-430, may not represent a member of the public, and accept compensation, in negoti- ating for an effecting the settlement of a claim for loss or damage.); KBA U-64 (A non-lawyer cannot request that a board or agency initiate an administrative action and grant a hearing or file an answer on behalf of an otherwise unrep- resented corporation or other artificial entity in an administrative hearing.). or business relations of one requiring the services." III. Filing out a form seeking approval of the settlement of administrative claims constitutes the practice of law under SCR 3.020 because it requires a legal analysis of claims and procedures. It is evident from a cursory examination of "Form 110–Agreement as to Compensation" that completing and filing such a form extends well beyond the mere ministerial act of providing basic information to the court relating to the claimant-respondent (name, date of birth, nature of injury), and that completing and submitting this form implies a somewhat sophisticated and detailed knowledge as to the legal implications inherent in the various parties' claims and defenses. It would be impossible to properly complete and submit this form without making a legal analysis of the claim at hand (specifically, a rather detailed and involved analysis). For example, properly filling out the date and nature of the injury presupposes a knowledge of the statute of limitations inherent in the claims to be settled, as well as a knowledge as to the appropri- ateness of the forum for addressing those claims and understanding the implication that, by so doing, other avenues of recovery are most likely going to be waived without further recourse. e question of whether any injuries arising outside the scope of the Worker's Compensation adjudication process exist, and a decision as to whether those claims should be addressed in tort litigation is presupposed. Moreover, questions as to whether there are any claims or defenses being waived by the parties at issue in this set- tlement, and whether the injuries reflected in the settlement are fairly accounted for under the scheme of recovery employed therein, are also apparent. e fact that issues of waiver of claims are specifically dealt with on the face of the form, in and of itself presupposes a legal analysis inherent in this process, as well as consultation with the parties involved in the claim and the adjudication thereof. ere is, frankly, no way that this form could be properly completed without making a substantial legal analysis of the applicant's claims, the value of those claims, the applicant's entitlement to recovery, and the opposing parties' defenses as to said claims, much less the appropriateness of the forum and other technical legal questions that would require the assistance of an attorney with significant experience in this area of practice to evaluate properly. Accordingly, the preparation and filing of "Form 110–Agreement as to Compensation" constitutes the practice of law under SCR 3.020. CONCLUSION Where a non-attorney insurance or claims adjuster, who is an employee of a Worker's Compensation insurer, its third-party administrator or a self-insured employer, completes and files on behalf of the insured a Form 110-Settlement Agreement with the Department of Workers' Claims, said individual has engaged in the unauthorized practice of law. NOTE TO READER is unauthorized practice opinion has been formally adopted by the Board of Governors of the Kentucky Bar Association under the provisions of Kentucky Supreme Court Rule 3.530 (or its predecessor rule). Note that the Rule provides in part: "Both informal and formal opinions shall be advisory only."

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