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2005 SESSION
055432772Be it enacted by the General Assembly of Virginia:
1. That § 2.2-1839 of the Code of Virginia, as it is effective and as it shall become effective, and §§ 54.1-3900.01 and 54.1-3936 of the Code of Virginia are amended and reenacted as follows:
§ 2.2-1839. (For expiration date /- See Editor's note) Risk management plans administered by the Department of the Treasury's Risk Management Division for political subdivisions, constitutional officers and others.
A. The Division shall establish one or more risk management plans specifying the terms and conditions for coverage, subject to the approval of the Governor, and which plans may be purchased insurance, self-insurance or a combination of self-insurance and purchased insurance to provide protection against liability imposed by law for damages and against incidental medical payments resulting from any claim made against any county, city or town; authority, board, or commission; sanitation, soil and water, planning or other district; public service corporation owned, operated or controlled by a locality or local government authority; constitutional officer; state court-appointed attorney; any attorney for any claim arising out of the provision of pro bono legal services for custody and visitation to an eligible indigent person under a program approved by the Supreme Court of Virginia or the Virginia State Bar; any receiver for an attorney's practice appointed under § 54.1-3900.01 or 54.1-3936; affiliate or foundation of a state department, agency or institution; any clinic that is organized in whole or primarily for the delivery of health care services without charge; any individual serving as a guardian or limited guardian as defined in § 37.1-134.6 for any consumer of a community services board or behavioral health authority or any patient or resident of a state facility operated by the Department of Mental Health, Mental Retardation and Substance Abuse Services; or the officers, agents or employees of any of the foregoing for acts or omissions of any nature while in an authorized governmental or proprietary capacity and in the course and scope of employment or authorization.
For the purposes of this section, "delivery of health care services without charge" shall be deemed to include the delivery of dental, medical or other health services when a reasonable minimum fee is charged to cover administrative costs.
B. Participation in the risk management plan shall be voluntary and shall be approved by the participant's respective governing body or by the State Compensation Board in the case of constitutional officers, by the office of the Executive Secretary of the Virginia Supreme Court in the case of state court-appointed attorneys, including attorneys appointed to serve as receivers under § 54.1-3900.01 or 54.1-3936, or attorneys under Virginia Supreme Court or Virginia State Bar approved programs, by the Commissioner of the Department of Mental Health, Mental Retardation and Substance Abuse Services for any individual serving as a guardian or limited guardian for any patient or resident of a state facility operated by such Department or by the executive director of a community services board or behavioral health authority for any individual serving as a guardian or limited guardian for a consumer of such board or authority, and by the Division. Upon such approval, the Division shall assume sole responsibility for plan management, compliance, or removal. The Virginia Supreme Court shall pay the cost for coverage of eligible persons performing services in approved programs of the Virginia Supreme Court or the Virginia State Bar. The Department of Mental Health, Mental Retardation and Substance Abuse Services shall be responsible for paying the cost of coverage for eligible persons performing services as a guardian or limited guardian for any patient or resident of a state facility operated by the Department. The applicable community services board or behavioral health authority shall be responsible for paying the cost of coverage for eligible persons performing services as a guardian or limited guardian for consumers of such board or authority.
C. The Division shall provide for the legal defense of participating entities and shall reserve the right to settle or defend claims presented under the plan. All prejudgment settlements shall be approved in advance by the Division.
D. The risk management plan established pursuant to this section shall provide for the establishment of a trust fund for the payment of claims covered under such plan. The funds shall be invested in the manner provided in § 2.2-1806 and interest shall be added to the fund as earned.
The trust fund shall also provide for payment of legal defense costs, actuarial costs, administrative costs, contractual costs and all other expenses related to the administration of such plan.
E. The Division shall, in its sole discretion, set the premium and administrative cost to be paid to it for providing a risk management plan established pursuant to this section. The premiums and administrative costs set by the Division shall be payable in the amounts at the time and in the manner that the Division in its sole discretion shall require. The premiums and administrative costs need not be uniform among participants, but shall be set so as to best ensure the financial stability of the plan.
§ 2.2-1839. (For effective date /- See Editor's note) Risk management plans administered by the Department of the Treasury's Risk Management Division for political subdivisions, constitutional officers, etc.
A. The Division shall establish one or more risk management plans specifying the terms and conditions for coverage, subject to the approval of the Governor, and which plans may be purchased insurance, self-insurance or a combination of self-insurance and purchased insurance to provide protection against liability imposed by law for damages and against incidental medical payments resulting from any claim made against any county, city or town; authority, board, or commission; sanitation, soil and water, planning or other district; public service corporation owned, operated or controlled by a locality or local government authority; constitutional officer; state court-appointed attorney; any attorney for any claim arising out of the provision of pro bono legal services for custody and visitation to an eligible indigent person under a program approved by the Supreme Court of Virginia or the Virginia State Bar; any receiver for an attorney's practice appointed under § 54.1-3900.01 or 54.1-3936; affiliate or foundation of a state department, agency or institution; any clinic that is organized in whole or primarily for the delivery of health care services without charge; any individual serving as a guardian or limited guardian as defined in § 37.1-134.6 for any consumer of a community services board or behavioral health authority or any patient or resident of a state facility operated by the Department of Mental Health, Mental Retardation and Substance Abuse Services; any participant who satisfies the requirements of § 2.2-1839.1; or the officers, agents or employees of any of the foregoing for acts or omissions of any nature while in an authorized governmental or proprietary capacity and in the course and scope of employment or authorization.
For the purposes of this section, "delivery of health care services without charge" shall be deemed to include the delivery of dental, medical or other health services when a reasonable minimum fee is charged to cover administrative costs.
B. Participation in the risk management plans shall be voluntary and shall be approved by both the participant's respective governing body or by the State Compensation Board in the case of constitutional officers, by the office of the Executive Secretary of the Virginia Supreme Court in the case of state court-appointed attorneys, including attorneys appointed to serve as receivers under § 54.1-3900.01 or 54.1-3936, or attorneys under Virginia Supreme Court or Virginia State Bar approved programs, by the Commissioner of the Department of Mental Health, Mental Retardation and Substance Abuse Services for any individual serving as a guardian or limited guardian for any patient or resident of a state facility operated by such Department or by the executive director of a community services board or behavioral health authority for any individual serving as a guardian or limited guardian for a consumer of such board or authority, and by the Division. Those participants under § 2.2-1839.1 shall not be required to obtain approval from any entity other than the Division. Upon such approval, the Division shall assume sole responsibility for plan management, compliance, or removal. The Virginia Supreme Court shall pay the cost for coverage of eligible persons performing services in approved programs of the Virginia Supreme Court or the Virginia State Bar. The Department of Mental Health, Mental Retardation and Substance Abuse Services shall be responsible for paying the cost of coverage for eligible persons performing services as a guardian or limited guardian for any patient or resident of a state facility operated by the Department. The applicable community services board or behavioral health authority shall be responsible for paying the cost of coverage for eligible persons performing services as a guardian or limited guardian for consumers of such board or authority.
C. The Division shall provide for the legal defense of participants and shall reserve the right to settle or defend claims presented under the plan. All prejudgment settlements shall be approved in advance by the Division.
D. The risk management plans established pursuant to this section shall provide for the establishment of trust funds for the payment of claims covered under such plans. The funds shall be invested in the manner provided in § 2.2-1806 and interest shall be added to the fund as earned.
Trust funds shall also provide for payment of legal defense costs, actuarial costs, administrative costs, contractual costs and all other expenses related to the administration of such plans.
E. The Division shall, in its sole discretion, set the premium, deductible, and administrative cost to be paid to it for providing risk management plans established pursuant to this section. The premiums and administrative costs set by the Division shall be payable in the amounts at the time and in the manner that the Division in its sole discretion shall require. The premiums, deductibles, and administrative costs need not be uniform among participants, but shall be set so as to best ensure the financial stability of the plans.
§ 54.1-3900.01. Protection of client interests; appointment of receiver for practice of a disabled, impaired, absent, deceased, suspended or disbarred attorney.
A. Upon a showing that an attorney is unable to properly
discharge properly responsibilities to his
clients by reason of the attorney's disability,
impairment, absence or death or that an
a suspended or disbarred attorney has
been disbarred or suspended and has not complied with Part Six,
Section IV, Paragraph 13 (K) (1)M of
the Rules of the Virginia Supreme Court, and that no responsible party capable
of conducting the affairs of the attorney properly
discharging the attorney's responsibilities to clients is known to
exist, the circuit court of any city or county wherein such the
attorney resides, or in the case of a deceased attorney
resided, or maintained an office, upon the ex parte petition
of Bar Counsel or the chairman of a district committee of the
Virginia State Bar, may issue an order appointing an
attorney or one or more attorneys
who shall have to serve as
receiver with the powers and duties specified in this section. The
court, in its discretion, may require a receiver appointed pursuant to this
section to post bond, with or without surety. The court may issue such order if
the petition, supported by affidavit of the petitioner and such other evidence
as the court may require, shows reasonable cause to believe that by reason of
the subject attorney's disability, impairment, absence, or death, the subject attorney is unable to properly discharge his
responsibilities to clients; or that the subject attorney's law license has
been suspended or revoked and the subject attorney has not complied with Part
Six, Section IV, Paragraph 13 M of the Rules of Supreme Court; and that no
responsible party capable of properly discharging the subject attorney's
responsibilities to clients is known to exist. The Virginia
State Bar shall use its best efforts to provide a copy of the petition,
affidavits, and notice of the time and place of any hearing to the subject
attorney and any known duly appointed personal representative of the subject
attorney or the subject attorney's estate.
B. Any attorney receiver so
appointed shall be bound by the attorney-client privilege and
confidentiality under the Virginia Rules of
Professional Conduct with respect to the records of
individual clients client matters and
shall not disclose any privileged or confidential client information
contained in the files so inventoried without
the client consent of the client to whom the file relates, except or
as required to carry out an
order of the court by
court order, or to respond to a Virginia State Bar disciplinary investigation
or an investigation by the Virginia State Bar Clients' Protection Fund
involving the subject attorney.
C. Any attorney receiver so
appointed shall, unless otherwise ordered by the court, (i) prepare and file
with the Virginia State Bar an inventory of all case files under the subject
attorney's control of the subject
attorney; (ii) notify in writing all
of the subject's subject attorney's
clients of the appointment and take whatever action seems
indicated the receiver deems appropriate to
protect the interests of the clients until such time as the clients have had an
opportunity to obtain substitute successor counsel, and in the case of a deceased attorney, notify in
writing the personal representative, if any, of the deceased attorney's estate
and the commissioner of accounts of
the circuit court in which the deceased attorney's estate is being administered
that the receiver may have a claim against the deceased attorney's estate for
fees and costs of the receivership; (iii) identify and
take control of all bank accounts, including without
limitation trust or otherwise and
operating accounts, over which the subject attorney had
signatory authority and take control
of the trust and operating accounts in
connection with his law practice; (iv) prepare and
submit an accounting
of receipts and disbursements and account balances of all funds under the
receiver's control for submission to the court within
four months of the appointment and annually thereafter until the receivership
is terminated by the court; (v) attempt to collect any accounts
receivable related to the subject's subject attorney's
law practice; (v) (vi)
identify and attempt to recover any assets wrongfully diverted from the subject
attorney's law practice, or assets acquired with funds wrongfully diverted from
the subject attorney's law practice; (vii) terminate the subject's
subject attorney's law practice; (vi)
(viii) reduce to cash all of the
assets of the subject's subject attorney's
law practice, and in the case of a deceased attorney notify in
writing the personal representative, if any, of the deceased attorney's estate,
and the commissioner of accounts of the circuit court in which the deceased
attorney's estate is being administered of any proposed liquidations of assets;
(vii) (ix) determine
the nature and amount of all claims of creditors, including clients, of the subject's
subject attorney's law practice; and (viii)
(x) prepare and file with the court a
report of such assets and claims proposing a distribution to such creditors and, in the case of a deceased attorney, notify in writing the personal
representative, if any, of the deceased attorney's estate and the commissioner
of accounts of the circuit court in which the deceased attorney's estate is
being administered
of the proposed distribution of the receivership funds. Upon the
court's approval of the receiver's report of the receiver, at a hearing after
such notice as the court may require to creditors, the personal representative
of the subject attorney's estate and the commissioner of accounts of the
circuit court in which the deceased attorney's estate is being administered, the
receiver shall distribute the assets funds
in the receiver's control, including funds produced by the liquidation of
the subject's subject attorney's
law practice, first to clients whose funds were or
ought to have been held in trust by the subject attorney,
then to the receiver in respect of the fees and for
fees, costs and expenses awarded pursuant to subsection
D E below,
and thereafter to the general creditors of the subject's subject
attorney's law practice, including clients whose funds were not
required to have been held in trust by the subject. The appointed
attorney shall also prepare a statement of receipts and disbursements and
account balances of all funds under his control for submission to the court.
The statement shall be submitted within two months of the appointment and
annually thereafter until the receivership is terminated by the court. The
court, in its discretion, may require any attorney appointed pursuant to this
section to post bond, with or without surety attorney, and
then to the subject attorney or the subject attorney's personal representative.
D. The court may determine whether any assets under the receiver's control should be returned to the subject attorney or the subject attorney's personal representative during the receivership.
D.E.
Any attorney receiver so
appointed shall be entitled, upon proper application to the court in which the
appointment was made, to recover an award of reasonable fees for services
rendered and to a recovery of necessary costs incurred,
costs and expenses. If there are not sufficient nontrust funds to
pay the award, then the shortfall shall be paid by the Virginia State Bar, to
the extent that the Virginia State Bar has funds available and the . The Virginia State Bar shall have a
claim against the subject attorney or his the
attorney's estate for the amount paid.
F. This statute is declared to be remedial. Its purpose is to protect the interests of clients adversely affected by attorneys who have either engaged in misconduct or because of disability, impairment, absence, or death are unable to provide legal services for their clients. It is to be liberally administered in order to protect those interests and thereby the public's interest in the quality of legal services provided by Virginia attorneys.
§ 54.1-3936. Protection of client interests in proceedings pending disciplinary action.
A. If Bar Counsel or the chairman of
a district committee of the Virginia State Bar has reasonable
cause to believe that an attorney is engaging in any activity which is unlawful
or in violation of violates the
Virginia Code of Professional Responsibility Rules
of Professional Conduct and which will result in loss of property
of one or more of the attorney's clients or any other person, he
Bar Counsel may make submit
an ex parte application petition to
the circuit court of the city or county wherein the attorney who is the subject
of the complaint petition resides
or is doing business for the issuance of an order authorizing the immediate
inspection by and production to representatives of
the applicant petitioner of
any records, documents, and physical or other evidence belonging to the subject
attorney or any professional partnership, professional limited
liability company, or professional corporation with which he the
subject attorney is associated. The court may issue such order
without notice to the attorney if the application, on
verified petition, supported by affidavit of
the applicant petitioner and
such other evidence as the court may require, shows reasonable cause to believe
that such action is required to prevent immediate loss of property of one or
more of the subject attorney's clients or any
other person. The papers filed with the court pursuant to this subsection shall
be placed under seal.
B. If Bar Counsel or the chairman of
a district committee of the Virginia State Bar has reasonable
cause to believe that an attorney is engaging in any activity which is unlawful
or in violation of the Virginia Code of
Professional Responsibility Rules of
Professional Conduct and which will result in loss of property of
one or more of the attorney's clients or any other person, he Bar
Counsel may file a complaint petition
with the circuit court of the county or city wherein the attorney
who is the subject of the complaint subject attorney resides
or is doing business. The complaint petition may
seek the following relief: (i) an injunction prohibiting the withdrawal of any
bank deposits or the disposition of any other assets belonging to or subject to
the control of the attorney who is the subject of the complaint the
subject attorney or any professional partnership, professional
limited liability company, or professional corporation with which he
the subject attorney is associated;
and (ii) the appointment of a receiver for all or part of the funds or property
belonging to or of the subject
to the control of the attorney who is the subject
of the complaint attorney's law
practice or of any professional partnership,
professional limited liability company, or professional corporation with which he
the subject attorney is associated.
The attorney who is the subject of the complaint subject
attorney shall be given notice of the
time and place of the hearing on the complaint petition
and an opportunity to offer evidence. The court, in its
discretion, may require a receiver appointed pursuant to this section to post
bond, with or without surety. The papers filed with the court
under this subsection shall be placed under seal until such time as the court
grants an injunction or appoints a receiver. The court may issue an injunction,
appoint a receiver or provide such other relief as the court may consider
proper if, after a hearing, the court finds that such relief is necessary or
appropriate to prevent loss of property of one or more of the subject
attorney's clients or any other person.
C. In any proceeding under subsection B of this section,
any professional partnership, professional limited liability company, or
professional corporation with which the subject attorney
who is the subject of the complaint is
associated and any other person or entity known to
Bar Counsel to be indebted to or having in his possession
property, real or personal, belonging to or subject to the control of such
attorney the subject attorney's law practice and
which property is sought to be protected, Bar
Counsel reasonably believes may become part of the receivership assets, shall
be served with a copy of the complaint petition
and notice of the time and place of the hearing and shall be
afforded an opportunity to respond and offer evidence.
D. The court, on motion filed by any party, may
transfer a proceeding under this section to any court in which a proceeding is
pending pursuant to § 54.1-3935 or § 54.1-3937 for the revocation of the
license of the attorney who is the subject of an order issued pursuant to this
section.
E.D. Any
attorney so appointed shall The
receiver shall, unless otherwise ordered by the court, (i) prepare
and file with the Virginia State Bar an inventory of all case files under the subject
attorney's control of the subject
attorney; (ii) notify in writing all
of the subject's subject attorney's
clients of the appointment and take whatever action seems
indicated the receiver deems appropriate to
protect the interests of the clients until such time as the clients have had an
opportunity to obtain substitute successor counsel,
and in the case of a deceased attorney, notify in writing the personal
representative, if any, of the deceased attorney's estate and the commissioner
of accounts of the circuit court in which the deceased attorney's estate is
being administered that the receiver may have a claim against the deceased
attorney's estate for fees and costs of the receivership; (iii)
identify and take control of all bank accounts,
including without limitation trust or otherwise and operating accounts, over which
the subject attorney had signatory authority and
take control of the trust and operating accounts in
connection with his law practice; (iv) prepare and
submit an accounting of receipts and disbursements and
account balances of all funds under the receiver's control for submission to
the court within four months
of the appointment and annually thereafter until the receivership is terminated
by the court; (v) attempt to collect any accounts receivable
related to the subject's subject attorney's
law practice; (v) (vi)
identify and attempt to recover any assets wrongfully diverted from the subject
attorney's law practice, or assets acquired with funds wrongfully diverted from
the subject attorney's law practice; (vii) terminate the subject's
subject attorney's law practice; (vi)
(viii) reduce to cash all of the
assets of the subject's subject attorney's
law practice; (vii) , and in the case
of a deceased attorney notify in writing the personal representative, if any,
of the deceased attorney's estate, and the commissioner of accounts of the
circuit court in which the deceased attorney's estate is being administered of
any proposed liquidations of assets; (ix) determine the nature and
amount of all claims of creditors, including clients, of the subject's
subject attorney's law practice; and (viii)
(x) prepare and file with the court a
report of such assets and claims proposing a distribution to such creditors and, in the case of a deceased attorney, notify in writing the personal
representative, if any, of the deceased attorney's estate and the commissioner
of accounts of the circuit court in which the deceased attorney's estate is
being administered of the proposed distribution of the receivership funds.
Upon the court's approval of the receiver's
report of the receiver, at a hearing after
such notice as the court may require to creditors, the personal representative
of the subject attorney's estate and the commissioner of accounts of the
circuit court in which the deceased attorney's estate is being administered, the
receiver shall distribute the assets of the subject's subject
attorney's law practice first to clients whose funds were or ought
to have been held in trust by the subject attorney,
then to the receiver in respect of the for fees and , costs, and expenses
awarded pursuant to subsection E,
and thereafter to the general creditors of the F belowsubject's subject
attorney's law practice, including clients whose funds were not
required to have been held in trust by the subject. The appointed
attorney shall also prepare a statement of receipts and disbursements and
account balances of all funds under his control for submission to the court.
The statement shall be submitted within two months of the appointment and
annually thereafter until the receivership is terminated by the court. The
court, in its discretion, may require any attorney appointed pursuant to this
section to post bond, with or without surety attorney, and
then to the subject attorney or the subject attorney's personal representative.
F.E. A
receiver appointed pursuant to this section shall be entitled, upon proper
application to the court in which the appointment was made, to recover an award
of reasonable fees for services rendered and to a recovery of
necessary , costs incurred,
and expenses. If there are not sufficient nontrust funds to pay
the award, then the shortfall shall be paid by the Virginia State Bar, to the
extent that the Virginia State Bar has funds available and the . The Virginia State Bar shall have a
claim against the subject attorney or his the
subject attorney's estate for the amount paid.
G.F.
The court may determine whether any assets under the receiver's control
of the receiver should be turned
over returned
to the subject attorney or the subject
attorney's personal representative during the receivership.
G. This statute is declared to be remedial. Its purpose is to protect the interests of clients adversely affected by attorneys who have engaged in misconduct. It is to be liberally administered in order to protect those interests and thereby the public's interest in the quality of legal services provided by Virginia attorneys.