Louisiana Supreme Court - 400 Royal St., New Orleans, LA 70130 | Tel: 504-310-2300 Hon. Bernette J. Johnson. Chief Justice.  John Tarlton Olivier., Clerk of Court.  Sandra A. Vujnovich. Judicial Administrator
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2006 Press Releases

CONTACT PERSON: VALERIE WILLARD
PUBLIC INFORMATION OFFICER
(504) 310-2590

 APRIL 5, 2006

FOR IMMEDIATE RELEASE


Chief Justice Pascal F. Calogero, Jr. announced today the Court’s promulgation of amendments to the lawyer discipline rules, and to the Rules of Professional Conduct, to provide for trust account overdraft notification. Trust account overdraft notification rules are designed to reduce occasions in which client funds are misappropriated by attorneys. The Court’s action follows the passage of complementary legislation (2005 La. Acts 249) which facilitates overdraft notification, and which recognizes the rulemaking authority of the Supreme Court of Louisiana in this area. Also, the Louisiana State Bar Association has supported the implementation of trust account overdraft notification through the promulgation of Court rules and legislation.


Pursuant to the new rules, lawyers and law firms will be required to notify the Office of Disciplinary Counsel (ODC) of all accounts in which client funds are held. Lawyers and law firms that hold client funds are to confect agreements with the banks which hold the client funds. The agreements will allow the banks to notify the Office of Disciplinary Counsel of overdrafts on the trust accounts.1


By requiring that the lawyer discipline agency be notified of overdrafts on client trust accounts, the rule changes function as an “early-warning” system that a lawyer is having a problem with his/her trust account. Early notification of overdrawn trust accounts may serve to prevent future misappropriations of client trust account funds.


The intent of the rules is not to discipline or unduly burden lawyers for occasional, inadvertent mistakes. In this regard, the 2005 legislation which facilitates overdraft notification provides that notification is not to be provided to the Office of Disciplinary Counsel when the overdraft has been caused by bank-imposed charges to the account. Furthermore, Chief Disciplinary Counsel Charles Plattsmier has authored an overdraft notification protocol which provides that no formal disciplinary investigation will be opened if the ODC’s Screening Department is able to determine that the overdraft incident was a one-time occurrence attributable to simple inadvertence or employee mistake.


The overdraft notification rule changes become effective on April 15, 2006. However, since the 2005 complementary legislation does not become effective until six months following this Court’s adoption of final rules on the subject, initial attorney-bank agreements which authorize trust account overdraft notification are to become effective on November 1, 2006 and thereafter.


The Court is hopeful that this new client protection mechanism is effective in reducing the number of occasions in which client funds are misappropriated.


1 The Office of Disciplinary Counsel investigates and prosecutes complaints alleging lawyer misconduct.

 

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