Over the years I have responded to many questions about the interpretation of Rule 4.2 governing communication with a represented party, especially when the represented party is a corporate entity. Rule 4.2 shields certain “represented” corporate constituents from direct communication about the subject of the representation by opposing counsel. Based upon questions I have received, there appears to be a misperception that counsel for a corporate defendant in a civil litigation matter can simultaneously represent any current or former constituent (witness) of the corporation “for purposes of the deposition only” to protect that person from informal communications with opposing counsel. This sort of dual representation, especially where that witness may have damaging information about the corporation, is ill-advised and is likely prohibited by the ethics rules. Here’s why:
Counsel for a corporation, represents the corporation as an entity. Rule 1.13. A lawyer may represent the corporation and any of its individual constituents (employees, members, shareholders, directors) so long as there is no disqualifying conflict of interest. Rule 1.13(g). Any dual representation in the same matter, however, requires that the lawyer obtain informed consent from both the organization and the individual to be represented. Rule 1.7. Presumably, representation of a corporation and a former constituent would be permissible subject to these same considerations.
A lawyer should not undertake representation of a client when he is aware of a disqualifying conflict of interest under Rule 1.7. When a lawyer represents a corporate entity, he may only undertake simultaneous representation of a current or former constituent of the organization if representation of one is not adverse to the interests of the other. For example, if a lawyer knows that a witness (former employee) has information that is adverse to the interests of the corporation, the lawyer should not undertake representation of that witness in the same matter. Once a lawyer has agreed to represent the client/witness, the lawyer owes that client a duty of loyalty which stretches throughout the matter he is handling.
Even if a lawyer could ethically limit the representation of the former employee to a deposition, if the former employee/witness provides information in the deposition that is inconsistent with the corporate client’s narrative or position, or adverse to the interests of the corporation in the matter, the corporate lawyer has a disqualifying conflict of interest at that very moment. The attempt to limit the representation to the deposition would be ineffective in preventing a conflict of interest. The lawyer cannot fulfill his duty of loyalty to both clients. Furthermore, if the deposition testimony could be used by the opposing counsel at hearing, or if the witness would be called to the stand during trial, the corporate lawyer’s duty of loyalty to the corporation may require cross examination of the witness/client. At the same time, the duty of loyalty owed to the former employee in this matter would preclude such action.
This dual representation would also raise the question whether the lawyer, in representing the former employee/witness in the deposition, was protecting the interests of the deponent or his corporate client when instructing the witness when to respond or in raising objections. A lawyer who advises a deponent/witness not to give relevant information that is subject to disclosure under applicable law or rules of evidence engages in professional misconduct under Rule 3.4 (d) and is acting adverse to the interests of the deponent. The lawyer seeking information from the deponent may bring a motion to compel, and if that motion is successful, the deponent may be ordered to pay costs/attorney’s fees for the motion. Any direction to the deponent not to provide relevant, discoverable evidence is an action against the interests of the deponent, and a conflict of interest. Furthermore, the lawyer has an obligation to follow procedural and evidentiary rules, and not unlawfully obstruct access to evidence. Rule 3.4.
If the former employee has any information that could be prejudicial to the corporation or helpful to the opposing party, a lawyer cannot undertake representation of this individual to try to shield this information from disclosure at deposition. If a lawyer tried to undertake representation of both the individual and the corporate client under these circumstances, this disqualifying conflict of interest would require the lawyer to withdraw from representation of both the corporation and the former employee. So, before a lawyer may undertake joint representation of a corporate defendant and a former employee, he must do his due diligence to determine that a conflict of interest is not likely to arise, and that he can represent the best interests of the former employee at all times in the deposition and at trial, if necessary. If he cannot do so, he must not offer to represent the former employee. Rule 1.7(a)(2).
Deanna Brocker | Comments Off on Rule 4.2 and Corporate Representation
What’s in a “Trade” Name? Registration Requirement Eliminated
July 30, 2021
Lawyers are likely aware of the new advertising rules that were certified by the NC Supreme Court in May 2021. But what you may not have noticed is that the requirement for State Bar registration of trade names, appearing in prior Rule 7.5(a), has been eliminated. This means that attorneys are no longer required to seek trade name approval from the State Bar. No more submitting forms and then waiting on a reply before launching a new website such as “callyourlitigators.com” or holding yourself out as “NC Litigation Law Group.” But this does not mean attorneys are free to advertise using any name they want. Here are the requirements that are still in place:
The trade name cannot be false or misleading pursuant to Rule 7.1
The trade name cannot imply a connection with a government agency or with a public or charitable legal services organization
The trade name may not include a professional entity designation such as PC, PA, or PLLC
If the firm name contains the name of a deceased or retired principal, there must have been a continuity in succession of the law firm (i.e., deceased or retired partner had to be a former principal of the firm or predecessor firm)
Use of a retired principal’s name in the firm name is only appropriate if the principal has ceased the practice of law
You must still file a certificate of assumed name with the register of deeds in each county in which business is conducted under an assumed name pursuant to N.C. Gen. Stat. §66-71.1 et al. and follow any other requirements under the law relative to trade or assumed names.
You must still use care before choosing how to hold yourself out to the public through any trade name, distinctive URL (e.g., NCestateplanatty), social media username, or online handle. The trade name may not compare your services with others (e.g., bestNCattorney.com is still prohibited) or imply a promised result (e.g., winbig.com). If the State Bar is no longer registering trade names, then it is also not regulating whether your proposed trade name is substantially similar to another being used. I would suggest that anyone who plans to use an assumed name first check with the NC Secretary of State’s website for assumed business names already registered in the database. You can also double check with your register of deeds prior to using a name in that locality. If you have questions regarding a possible trade name, just give us a call!
Deanna Brocker | Comments Off on What’s in a “Trade” Name? Registration Requirement Eliminated
Ethical Expression of Thanks
June 25, 2021
As many of you already know, the N.C. State Bar adopted (and the NC Supreme Court certified in May 2021) amendments to the Rules of Professional Conduct pertaining to attorney advertising. Many changes involved moving rules to comments, moving comments to different rules, and some rewording for clarification. But, there are some significant changes. One of those changes now permits attorneys to give a nominal thank you gift to someone who refers them a client. The new Rule 7.2(b)(4) states:
A lawyer shall not compensate, give or promise anything of value to a person for recommending the lawyer’s services except that a lawyer may … give nominal gifts as an expression of appreciation that are neither intended nor reasonably expected to be a form of compensation for recommending a lawyer’s services.
This is a marked change from the prior rule, which strictly prohibited any gift of appreciation for a referral. The new rule acknowledges that a small, thank you gift, expressing appreciation, does not offend the purpose of the rule, which is to prevent attorneys from paying for referrals. Ideally, referrals should be based upon a person’s experience with the firm or knowledge of the firm or the lawyer. They should not be motivated by payment or expected remuneration.
So, what is still not permitted?
Gifts of more than a nominal amount (e.g., more than a holiday or hospitality gift) as an expression of thanks.
A promise of anything of value to the individual in exchange for a recommendation, social media post, or interaction with a social media platform.
A promise of payment to a charity in exchange for a social media post or social media interaction.
A promise of a referral for a referral — no quid pro quo.
Any indication by an attorney, prior to a referral or social media endorsement, that a gift may be forthcoming as a result.
Now, if someone refers a prospective client to you, in addition to a thank you note, it is ethically permissible for you to send that person a $10 or $20 gift card to Target or Starbucks. You can send them your firm’s swag. You can also send flowers. Box seats to a Hurricanes game, however, would be overdoing it a bit. There is no definition of nominal in the Rules; you just need to use your best judgment. When in doubt, contact the State Bar’s hotline or our office for guidance.
Deanna Brocker | Comments Off on Ethical Expression of Thanks
Important Proposed Changes to HIPAA and HITECH Act: Comment Now!
March 1, 2021
The federal government is proposing significant changes to the regulations governing health care records that could affect you as a consumer, health care professional, or other professional that assists or represents health care providers or entities. The proposed changes fall into two main categories: (1) changes to increase patients’ access to records and information, which modify and add requirements for providers; (2) amendments to facilitate the sharing of information and records among multiple providers for the same individual to improve care and reduce providers’ risk and liability for doing so. You have until May 6, 2021 to submit comments on the proposed changes.
On January 21, 2021, The United States Department of Health and Human Services (“HHS”) issued a Notice of Proposed Rulemaking to modify Privacy Rule under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH Act). The Notice of Proposed Rulemaking outlines several potential and important changes for covered entities that will have practical implications in their day-to-day operations. The idea behind the changes is to address what the HHS calls “unnecessary burdens” that may impede care coordination and case management communications among individuals and covered entities (including hospitals, physicians, and other health care providers, payors, and insurers), while still protecting the privacy and security of a patient’s protected health information (“PHI”). 
Importantly, any member of the public has the opportunity to comment on the proposed changes before they are adopted as final rules. In fact, HHS has requested feedback on the feasibility of these changes as well as insight on any unintended consequences. As noted above, the deadline to comment on the changes is May 6, 2021. You can view the complete Notice of Proposed Rulemaking and submit your comments to HHS on the proposed changes here.
Some of the key changes related to health records and access to PHI include:
Adding definitions for the terms “electronic health record” (EHR) and “personal health application.”
HHS recognizes that “more and more, individuals use personal health applications (‘apps’) to access and manage their personal health information.” Given this evolution, HHS proposes to clarify that “one of the mechanisms by which a request for access can be fulfilled is by transmitting an electronic copy of an individual’s PHI to a personal health [app] used by the individual.” Importantly, HHS is of the position that “a personal health [app] is not acting on behalf of, or at the direction of a covered entity, and therefore would not be subject to the privacy and security obligations of the HIPAA Rules.”
Changing rules on the individuals’ right of access to PHI by:
Enhancing the patients’ rights to inspect their PHI in person, which includes allowing individuals to take notes or use other personal resources to view and capture images of their PHI at the time of the patient visit, without delay.
Shortening covered entities’ required response time to no later than 15 calendar days (from the current 30 days) with the opportunity for an extension of no more than 15 calendar days (from the current 30-day extension). Where state law provides a shorter timeline for response, state law will control.
Reducing the burden on individuals to provide identity verification when exercising their access rights. HHS takes the position that requiring notarization or requiring proof of identity in person as overly burdensome, when a more convenient method for remote verification is practicable for the covered entity.
Enhancing the individuals’ ability to direct the sharing of PHI in an EHR among covered health care providers and health plans. This will enable covered health care providers and health plans to submit an individual’s access request to another health care provider and to receive back the requested electronic copies of the individual’s PHI in an EHR. Importantly, the individual’s request for transfer of this PHI can be done orally, as long as it is “clear, conspicuous, and specific.” The proposed requirement would replace the current requirement that the request be in writing, signed by the individual, and “clearly identifying the designated person and where to send the copy of the PHI.”
In conjunction with the preceding change, the entity that receives an individual’s request for transfer of records from a third covered entity (or “disclosing entity”) would be required to submit an individual’s clear, conspicuous, and specific request to disclosing entity within 15 calendar days of receipt of the request from the individual. In turn, the disclosing entity would then be required to respond by providing the electronic copy to requesting entity, as soon as practicable, but not later than 15 calendar days after receiving the request.
HHS also proposes to limit the individual right to direct the transmission of PHI to a third party to electronic copies of PHI in an EHR.
Establishing that electronic PHI (ePHI) must be provided to the individual at no charge (unless the request requires the provider to incur actual costs like supplies, postage, or labor for copying).
Amending the fees for responding to requests to direct records to a third party. The revised fee structure is fully outlined in the Notice of Proposed Rulemaking.
Requiring covered entities to post on their websites the estimated fee schedules for access and disclosures (and providing a copy at the point of service upon request). The specific requirements for the fee schedules are also outlined in the Notice of Proposed Rulemaking.
Requiring covered entities to provide individualized estimates of fees for an individual’s request for copies of PHI and itemized bills for completed requests.
No longer requiring an individual’s written acknowledgment of receipt of a covered entity’s Notice of Privacy Practices (“NPP”) (a copy of the NPP must still be provided to the patient). Individuals would instead have a right to discuss the NPP with a person designated by the covered entity. The proposal would also relieve providers from the burden of retaining copies of such documentation for six years.
Modifying the content requirements of the NPP provided to the individual.
The required header of the NPP would need to specify that the notice contains information about (1) how to access health information; (2) how to file a HIPAA complaint; and (3) the individuals’ right to receive a copy of the notice and to discuss its contents with a designated person (and set forth such person’s contact information, including phone and email and whether this person is on site). The NPP would need to specify how an individual can obtain a copy of their records at limited cost or free of charge, and describe the right to direct a covered health care provider to transmit an electronic copy of PHI in an EHR to a third party. The NPP may also include information about how to direct disclosure of PHI to a third party, when their PHI is not in an EHR.
The foregoing proposed changes reflect the reality that most health information is or will eventually be stored and exchanged electronically, with the idea that patients will prefer to access their information on a digital platform such as a personal health app. These rules are certainly aimed at reducing the burden on the individual to access his or her health information but may also reduce the paperwork burden on providers. If, however, providers can identify any unintended or uncontemplated consequences of the foregoing proposals, now is the time to provide such feedback to HHS, before the changes become final.
Another set of changes is aimed at facilitating better case management and care coordination by facilitating disclosure of PHI. These changes include:
Amending the definition of “health care operations” in 45 CFR 164.501 to encompass all care coordination and case management by health plans, whether individual-level or population-based, facilitating necessary disclosures.
Creating an exception to the “minimum necessary” standard for individual-level care coordination and case management uses and disclosures. The minimum necessary standard currently requires covered entities to limit uses and disclosures of PHI to the minimum necessary needed to accomplish the purpose of each use or disclosure. This proposal would relieve covered entities of this limiting requirement with respect to individual care coordination and case management, regardless of whether such activities constitute treatment or health care operations.
Enabling covered entities to disclose PHI—without prior authorization—to social services agencies, community-based organizations, home and community-based service providers that provide supportive services addressing health risks (e.g., hunger, homelessness).
Encouraging disclosures of PHI to help individuals with substance abuse disorders, serious mental illness, and in “emergency circumstances.” HHS is proposing to relax the privacy standard that permits covered entities to make disclosures of PHI based on their “professional judgment.” Instead, a covered entity could make such disclosures based in its “good faith belief” that the use or disclosure is in the best interests of the individual. The covered entity would enjoy a presumption that it acted in good faith when making the disclosure; however, this presumption could be overcome with evidence of bad faith.
Enabling covered entities to disclose PHI to avert a threat to health or safety when a harm is “serious and reasonably foreseeable,” instead of the current, stricter standard which requires a “serious and imminent” threat to health or safety. The proposed modification would allow covered entities to use/disclose PHI without having to first determine whether the threatened harm is actually imminent. Instead, the covered entity can disclose when it determines that the threatened harm is “reasonably foreseeable.”
Permitting disclosures of PHI to Telecommunications Relay Services (TRS) (assistants for persons who are deaf, hard of hearing, or deaf-blind, or who have a speech disability).
These proposed changes are designed to enhance the care provided to the patient by enabling providers to make appropriate disclosures in the best interest of the patient. It appears that the idea behind these changes is to encourage more comprehensive “wrap-around” care with the goal of saving the lives of those struggling with addiction or mental illness through early intervention. HHS has encouraged the public to comment on these proposed changes as well.
 Citations have been omitted from this post, but all quotations and information were obtained from HHS’ January 21, 2021 Notice of Proposed Rulemaking.
Whitney Waldenberg | Comments Off on Important Proposed Changes to HIPAA and HITECH Act: Comment Now!
Ethics Advice: A Cost of Professional Practice
February 10, 2021
A large part of my practice involves giving ethics advice to lawyers. Sometimes the advice is about their own conduct, and other times, the question concerns opposing counsel’s conduct. Still other advice encompasses a mixture of law practice management strategies, ethics advice, and best practices, such as proper trust accounting procedures, law firm bonuses, or employment agreements.
A lawyer is permitted to consult another professional to secure legal advice about the lawyer’s compliance with the Rules of Professional Conduct even if that means he or she must reveal client confidential information. The same is true when the lawyer is seeking advice about their obligations when another lawyer has committed a violation of the Rules. Any lawyer who consults with me regarding his ethical obligations, even if that advice may delve into related practice management issues, is protected by Rule 1.6, the confidentiality rule. That means that a lawyer is permitted to reveal client confidential information to me to secure ethics advice pursuant to Rule 1.6(b)(5), and I am obligated to keep that information confidential pursuant to Rule 1.6(a). Similarly, a lawyer may reveal client confidential information to claims counsel for their malpractice carrier as necessary to assist with a liability claim under Rule 1.6(b)(6) or to obtain advice in hopes of avoiding a potential malpractice claim under Rule 1.6(b)(5).
Recently, an attorney asked me whether he could pass along my fees for ethics advice about his own professional obligations to his client. Ordinarily, the answer is no. Just like a lawyer may not charge a client for fees or expenses associated with a motion to withdraw or to participate in the State Bar’s fee dispute program, these expenses are part of a lawyer’s professional obligation to comply with the rules. See 2007 FEO 8. So, if a lawyer is asking about his own professional conduct, such as “Do I have a conflict of interest,” “Is this fee agreement compliant with the ethics rules,” or “Can I speak to this constituent of a represented organization,” any costs associated with obtaining that information cannot be passed along to the client. If, however, the ethics advice sought will be used to advance the objectives of the client or protect the client’s interests, such as a motion to disqualify opposing counsel based upon a conflict, then any cost of those services may be passed along to the lawyer’s client, with client notice and consent. Sometimes, a lawyer may include in a fee agreement that they will pass along costs of experts or consultants to their clients. Such language is permissible but would not absolve a lawyer of the duty to communicate with the client about the specific need for the expert’s or consultant’s services. If the client consents to the cost of an expert’s advice or preparation of an affidavit regarding a conflict of interest of opposing counsel, for example, there is no issue in passing along those costs to the client.
Keep in mind that if you are asking advice about your own professional conduct on a prospective basis, you can always contact the ethics “hotline” at the State Bar—email@example.com. The advice is free and confidential. Importantly, the ethics staff will not respond to questions about your own past conduct or any conduct of another attorney. For these kinds of questions in particular, you may want private ethics counsel. We’re always here to help if you need ethics advice.
Deanna Brocker | Comments Off on Ethics Advice: A Cost of Professional Practice
Happy Holidays from The Brocker Law Firm
December 18, 2020
Deanna Brocker | Comments Off on Happy Holidays from The Brocker Law Firm
COVID Advice on the Fly? Think First
September 16, 2020
The pace at which laws and regulations are changing due to COVID-19 can make your head spin. Efforts to keep abreast of the changing regulatory landscape can be daunting. Local, state, and federal government have enacted or adopted measures to address the pandemic and its economic fallout. In North Carolina, you have regulatory agencies and occupational licensing boards scrambling to adopt amended rules or provide guidance to their licensees. State and local courts have adopted amended filing schedules and deadlines, as well as amended procedures for, heretofore, in-person proceedings. The governor continues to issue executive orders; the general assembly responds with legislation. There’s changing guidance from the IRS on deadlines, retirement distributions, tax relief, among others. OSHA has issued several Temporary Enforcement Guidance Memoranda. There is legislation affecting small business loans, paid sick leave, insurance claims, healthcare, and the list goes on and on. In addition, it seems that developments in the law related to COVID change almost daily.
How can you and your firm keep track of the dizzying array of COVID-related changes in the law and properly advise your clients? Because the changes touch so many different areas of the law (employment, business, tax, healthcare, regulatory, etc.), it is a challenge, especially for small firms or solos, to stay abreast of or have confidence that they have identified the most recent guidance on the vast array of changes to the law. Larger law firms and corporate legal departments may have it easier. They may elect to assign staff lawyers to focus on and track COVID-related changes in the law or to coordinate among the different practice groups in the firm or in-house legal departments to track, in a comprehensive way, changes in the law which may affect their clients.
For small firms or solos, knowing what you don’t know is key. If you are a corporate or transactional lawyer, your small business client may look to you for advice about paid sick leave policies, OSHA compliance issues, tax benefits or payroll protection, among others. If your practice is not ordinarily focused on these aspects of regulatory, employment, or tax issues, now may not be the time to figure it out. More and more lawyers are dabbling in areas of the law not ordinarily in their wheelhouse, especially since the economic downturn. I have written articles and given CLEs on the risks (ethical and liability) associated with dabbling in unfamiliar territory without taking the time, or assembling the necessary resources, to become competent in that area of the law. The rapidly changing COVID-related modifications and temporary changes to existing laws exacerbate these risks.
Before advising a client on unfamiliar COVID-related issues, think first. Advise the client that the issue is not in your wheelhouse. If you would be willing and have the time to spend researching the issue, tracking the changes to the legal landscape, and possibly consulting with someone else with expertise in the area, then you should advise the client of what would be necessary for you to be able to appropriately advise them. If you plan to charge the client to become competent in this area, you should provide some estimate of what it may cost to get to that point so the client can make an informed decision about representation.
Finally, given the fast pace at which changes are taking place, you should stay on top of continuing developments relative to the issue presented, even after you have provided advice. Furthermore, you should advise the client whether the laws, regulations, or guidance appears to be temporary or permanent, if possible. Just know that in the time it takes to become acquainted with the COVID-based developments, things could change again.
Deanna Brocker | Comments Off on COVID Advice on the Fly? Think First
Brush Up On Your Intake
August 12, 2020
The old saying “an ounce of prevention is worth a pound of cure” can certainly be applied to your firm’s intake procedures. If you get it right on the front end, you won’t have to withdraw from a case you never should have taken in the first place. It is important that your procedures are written down with specific steps to follow for each and every potential new client or matter.
When a potential new client calls, the firm employee should obtain sufficient detail from the individual to run a conflict check and to provide enough information for the attorneys to decide if it is a case they want to take. At a minimum, the firm employee will want to get the potential client’s name, email, phone number, a statement of the nature of the case, and the names of any involved parties, particularly any adverse parties.
During this initial call, the firm employee should also explain the consultation process, fees for same (if applicable), and the need to complete a conflict check. If the situation warrants, the staff should inform the potential client that no attorney-client relationship will be formed until a conflict check clears AND an attorney has reviewed the relevant information and determined he can offer legal services.
Initially, the names of all parties should be searched through all firm systems (case management, Dropbox, contacts, etc.) to determine if there is any conflict. You should also provide the conflict information, including a brief description of the matter, to all attorneys in the firm to determine if anyone has a conflict. We recommend sending the information via email. Each attorney should respond to the email with either “no conflict” or by indicating that they do have a conflict and what that conflict is. Those emails should be saved to the potential client’s file.
If the conflict check clears, and the lawyer believes the matter is one the firm may be willing to accept, the firm employee should then contact the potential client to set up the consultation. We recommend having an initial attorney-client consultation before offering services, though it is not specifically required by the ethics rules. If, during the consultation or any point thereafter, the client mentions additional parties, the assigned attorney should make certain those names are checked for a conflict as well.
If there is a disqualifying conflict during the initial conflict check, the firm employee should contact the potential client, indicate the firm is unable to assist, and, if possible, provide a referral to another firm or attorney.
Additionally, your intake staff also functions as a gatekeeper. That person is on the front lines and can get a sense of the type of person the potential client is from the initial conversations. This is a little harder to quantify and relies on the firm employee to use their knowledge of the firm coupled with their experience in customer service as well as their instincts to determine whether they believe the potential client is a good fit for the firm. The intake staff may get a sense that the potential client is high maintenance or has unrealistic expectations about the level of service they want from the firm. This kind of insight could be invaluable and may help the firm’s attorneys determine whether the firm would be in a position to assist the client or whether the client’s expectations should be managed in a different way from the outset.
Firm employees should receive training relative to the intake process and the attorney’s obligations under the Rules of Professional Conduct. You should have written guidelines regarding what can and should be said in the initial call, as well as what should not be said. The staff needs to be very careful not to cross into the area of providing legal advice. Many times, potential clients will pepper the intake firm employee with questions and try to push them to answer. The firm employee needs to be on their toes and make sure to indicate, repeatedly if necessary, that they are not an attorney and cannot provide any type of legal advice.
Another pitfall for firm employees is making promises or guarantees about the outcome of the potential matter. It is easy for the employee to want to reassure a potential client, especially when they are upset; however, they need to be thoughtful in their response by only indicating that the attorney should be able to provide them with guidance.
We have found that the best way to make certain the intake procedures are followed each time is to create and use a new client intake form which includes a place for all of the pertinent information and then a checklist section where the firm employee can check off when each stage of the new client intake process is complete.
Training, education, and supervision of your staff are the keys to successful intake. We are happy to assist you with training or putting together your new client intake process and the accompanying documentation. Please reach out to us!
Professionals and the Duty to Self-Report – Part II
June 11, 2020
In our last blog, we discussed the duties imposed on licensed or certified professionals to self-report if they are on the receiving end of a complaint or dealing with legal troubles. Many professional licensing authorities have specific requirements and deadlines to report complaints, judgments, or other matters as they arise. We previously looked at proactive self-reporting requirements for Attorneys, Mediators, Real Estate Brokers, Appraisers, and Certified Public Accountants.
Now, we will provide a thumbnail sketch of reporting requirements in several healthcare professions: Physicians and Physician Assistants, Dentists, Psychologists, and Pharmacists.
As careful as we may be, mistakes can happen, and situations can go awry. A patient may have an adverse reaction to medication and end up in the ER. Or life momentarily gets the better of you and you find yourself the defendant in court.
If it does happen, you might want to handle it quietly and avoid anyone finding out. It is important, however, that you immediately determine what you are required to report to your licensing authority. Failure to make the required report is often grounds for disciplinary action, even if the event that creates the reporting obligation would not warrant discipline.
This information is related only to proactive self-reporting and does not cover any other reporting that may be required when it is time to renew a professional license. It is up to each individual to know the rules in your profession.
Physicians and Physician Assistants
In accordance with 21 NCAC 32X .0101, licensed physicians and physician assistants must report to the Medical Board within 60 days any update to the information required by GS 90-5.2(a), including:
malpractice judgments and settlements;
conviction of a felony and certain misdemeanors;
any final disciplinary order or action of any regulatory board or agency; and
any final disciplinary order or other action resulting in suspension or revocation of privileges.
The following must be reported to the Medical Board within 30 days:
under GS 90-5.4(a), any incident involving sexual misconduct of any licensee with a patient;
under GS 90-5.4(b), fraudulent prescribing, drug diversion, or theft of any controlled substances by another licensee;
under GS 90-14.13(b), any malpractice judgment or settlement against him/her where the licensee does not have professional liability insurance or has insurance from entities not owned and operated within North Carolina; and
under GS 90-16, any felony arrest or indictment, any arrest for driving while impaired, and any arrest or indictment involving controlled substances.
Dentists holding a permit to administer general anesthesia or sedation are required to report an adverse occurrence to the Dental Board. Under the applicable Dental Board rule, 21 NCAC 16Q .0703, a permittee must report within 72 hours after the death of a patient related to administration of general anesthesia or sedation within the preceding 24 hours. A permittee must also report within 30 days after an adverse occurrence that results in permanent brain dysfunction within 24 hours of the procedure, or physical injury or severe medical emergency causing hospitalization within 24 hours of the procedure.
The American Psychological Association Ethical Principles of Psychologists and Code of Conduct, Standard 1.05, is incorporated in the Psychology Practice Act, GS 90-270.15(a)(10). Under Standard 1.05, if an apparent ethical violation by another psychologist has substantially harmed or is likely to substantially harm a person or organization, and the violation is not appropriate for or cannot be resolved by informal resolution, psychologists must take further appropriate action. Such action might include referral to state or national professional ethics committees or state licensing boards, although this standard does not apply if intervention would violate confidentiality rights. There is no proactive self-reporting requirement under the APA Ethics Code.
There is no proactive self-reporting requirement related to disciplinary issues for pharmacists. However, in the event of the loss or theft of controlled substances, pharmacist-managers are required to report within one (1) business day of discovery to the U.S. Drug Enforcement Administration pursuant to 21 CFR 1301.76, and must report the loss to the Pharmacy Board within 10 days of discovery pursuant to GS 90-85.25. In addition, under 21 NCAC 46 .2502, pharmacist-managers are required to report to the Pharmacy Board within 14 days of becoming aware of the probability that a prescribed drug or device dispensed from a permitted location has caused or contributed to customer death.
Caveats and Conclusion
If you find yourself dealing with a professional complaint or a legal problem or if you are aware of a serious problem or issue with another licensee, it’s critical that you immediately assess your obligation to report with respect to all the licenses and certifications you hold. The longer you wait, the greater your risk of being disciplined simply for failing to report a matter that might otherwise have been minor.
Our previous blog and the above summary of reporting obligations are meant only for informational purposes to raise awareness of professional obligations that might exist. A summary cannot capture all the relevant details for these reporting requirements. Also, this is not an exhaustive list. If you maintain a license or certification from a different entity, or you have questions about other types of information you may be required to report (such as address changes), you should check your licensing authority’s governing statutes and rules.
Finally, this is not legal advice and should not be relied upon exclusively in determining any professional’s reporting obligations. Rules change and details matter. If you have questions about your own situation, consult with legal counsel. The attorneys in our office assist licensed and certified professionals with these kinds of inquiries regularly. We’re happy to see if we can assist you, too.
Dauna Bartley | Comments Off on Professionals and the Duty to Self-Report – Part II
Professionals and the Duty to Self-Report – Part I
June 1, 2020
It happens to the best of us. As licensed or certified professionals, we strive to abide by the rules of our profession and fulfill our obligations, but you know what happens to the best-laid plans. As careful as we may be, mistakes can happen, and situations can go awry. The buyer in a real estate sale might feel the transaction did not go as promised and so they file a complaint against the selling agent. Or life momentarily gets the better of you and you find yourself the defendant in court.
If you are on the receiving end of a complaint or dealing with legal troubles, it’s natural to feel defensive or embarrassed. You might want to handle it quietly and avoid anyone finding out. It is important, however, that you immediately determine what you are required to report to your licensing authority.
Many professional licensing authorities have specific requirements and deadlines to report complaints, judgments, or other matters that arise. Failure to make the required report is often grounds for disciplinary action. In the following, we provide a thumbnail sketch of proactive self-reporting requirements for several professions: Attorneys, Mediators, Real Estate Brokers, Appraisers, and Certified Public Accountants. In our next blog, we’ll look at some healthcare professions.
This information is related only to proactive self-reporting and does not cover any other reporting that may be required when it is time to renew a professional license or certification. It is up to each individual to know the rules in your profession. Most professions have self-reporting obligations, but the specific duties vary significantly.
The North Carolina Rules of Professional Conduct require an attorney to self-report promptly the misapplication or misappropriation of trust funds or other entrusted property. See Rule 1.15-2(p). Otherwise, there is no proactive self-reporting requirement related to other disciplinary issues under the Rules of Professional Conduct. However, Rule 8.3(a) sets out a reporting requirement pertaining to the professional misconduct of another lawyer, although the rule is limited if the client objects to the lawyer making a report of confidential information.
NCDRC Certified Mediators
Under Rule 8 of the mediation rules for both civil superior court and family court, certified mediators must report to the NC Dispute Resolution Commission within 30 days of receiving notice of: pending criminal charges; criminal convictions; restraining orders issued against them; failures to appear; pending or closed grievances of complaints filed with or disciplinary action taken against them by a professional licensing, certifying, or regulatory body; judicial sanctions; and civil judgments, tax liens, or bankruptcy filings.
For example, if you are an attorney and also a certified superior court mediator, and you receive notice that a former client has filed a grievance with the State Bar against you, your 30-day clock has now started to run. You must report to the DRC within 30 days of when you receive notice that a grievance was filed.
Real Estate Brokers
Licensed real estate brokers must report to the NC Real Estate Commission within 60 days of a final judgment, order, or disposition of a case. The applicable REC rule, 21 NCAC 58A .0113, provides for mandatory reporting of: any felony or misdemeanor conviction; any discipline, conciliation agreement, or consent order with any agency in connection with any occupational license; and the restriction, suspension, or revocation of a broker’s notarial commission.
Real Estate Appraisers
Licensed or certified real estate appraisers and registered trainees must report to the Appraisal Board within 60 days of a final judgment or final order against them. Under GS 93E-1-12(b1) and 21 NCAC 57A .0409, licensees must report: convictions for offenses involving dishonesty, fraud, or deceit; civil judgments against them for fraud, misrepresentation, or deceit in appraisals; disciplinary action against any professional license in North Carolina or any other state; and being adjudged mentally incompetent. Under GS 93E-1-12(b)(4), licensees are also required to report denial of licensure in another state.
Certified Public Accountants
Certified public accountants must report to the CPA Board within 30 days of a final judgment, order, or settlement. The applicable CPA Board rule, 21 NCAC 08N .0208, provides for mandatory reporting of: any conviction for a criminal offense; a judgment or settlement in a civil suit, bankruptcy action, administrative proceeding, or binding arbitration; any written settlement in which a client or former client releases the CPA from liability grounded in, among other things, allegations of professional negligence, regardless of whether suit was filed; any inquiry or investigation by the criminal investigation divisions of the IRS of a state department of revenue pertaining to tax matters; and any lien filed by the IRS or any state department of revenue regarding failure to pay taxes.
Caveats and Conclusion
If you find yourself dealing with a professional complaint or a legal problem, it’s critical that you immediately assess your obligation to report with respect to all the licenses and certifications you hold. The longer you wait, the greater your risk of being disciplined simply for failing to report a matter that might otherwise have been minor.
The above summary of reporting obligations is meant only for informational purposes to raise awareness of professional obligations that might exist. A summary cannot capture all the relevant details for these reporting requirements. Also, this is not an exhaustive list. Our next blog will cover Physicians and Physician Assistants, Dentists, Psychologists, and Pharmacists. If you maintain a license or certification from a different entity, or you have questions about other types of information you may be required to report (such as address changes), you should check your licensing authority’s governing statutes and rules.
Finally, this is not legal advice and should not be relied upon exclusively in determining any professional’s reporting obligations. Rules change and details matter. If you have questions about your own situation, consult with legal counsel. The attorneys in our office assist licensed and certified professionals with these kinds of inquiries every day. We’re happy to see if we can assist you, too.
Dauna Bartley | Comments Off on Professionals and the Duty to Self-Report – Part I