Unauth. Prac. of Law Com. v. State, Department of Wkrs. Comp.

543 A.2d 662, 1988 R.I. LEXIS 71, 1988 WL 55350

• Court: Supreme Court of Rhode Island
• Decided: June 2, 1988
• Docket: 86-328-Appeal
• Status: Published

Opinions

OPINION

WEISBERGER, Justice.

This case comes before us on appeal by the defendants from a judgment entered in the Superior Court declaring portions of two statutes enacted by the General Assembly, G.L. 1956 (1984 Reenactment) § 42-94-5, as amended by P.L. 1986, ch. 1, and G.L. 1956 (1986 Reenactment) § 28-33-l.l(i)(l)(C), unconstitutional as vio-lative of this court's exclusive power to regulate the practice of law. We reverse. The facts of the case insofar as pertinent to this appeal are as follows.

At its 1985 session the General Assembly enacted a set of comprehensive statutory provisions that created a Department of Workers’ Compensation, §§ 42-94-1 to 42-94-18 (inclusive). The first section of this chapter sets forth the following legislative findings:

“The general assembly finds: that the present workers’ compensation system in the state suffers from structural problems, with powers, duties and functions divided among various departments and divisions; that such problems lead to higher costs of workers’ compensation and delays in compensating injured workers; that there is a need for informal hearings as well as formal hearings; that assistance and information should be readily available to the parties and therefore the general assembly finds it would be in the best interest of the peo-pie of the state to consolidate the powers, duties and functions relating to workers’ compensation into one department.

“The general assembly finds that the workers’ compensation commission, established by chapter 3297 of the public laws of 1954, wherein workers’ compensation cases pending before the superior court were transferred to the workers' compensation commission for determination, shall continue to remain as a distinct separate judicially independent entity, administered completely separate and apart from the department of workers’ compensation created by this chapter.” Section 42-94-1.

The General Assembly, in attempting to implement the scheme of establishing informal hearings within the department as an initial procedure to supplement the formal hearings before the Workers’ Compensation Commission, created an office of employee assistants. The function and purpose of these employee assistants are set forth in § 42-94-5 as follows:

“The director of the department of workers’ compensation shall provide adequate funding for an office of employee assistants and shall, subject to the personnel law, appoint the assistants to the staff of the department. Assistants should, at a minimum, demonstrate a level of expertise roughly equivalent to that of insurance claims’ analysts or adjusters. The purpose of employee assistants shall be to provide advice and assistance to employees under the workers’ compensation act and particularly to assist employees in preparing for and assisting at informal conferences under § 28-33-1.1.

“No employee of the office of employee assistants or hearing office of the department may represent any employee, employer, insurer, self-insurer, group self-insurer, adjusting company or self-insurance company at a conference or hearing within the department or before the workers’ compensation commission for a period of two (2) years after terminating employment with the office or department.

“The director shall appoint such number of employee assistants as he deems necessary to carry out the provisions of the workers’ compensation act.”

The Legislature enacted § 28-33-1.1 in order to streamline the disposition of initial applications for compensation on the part of injured workers. Pursuant to § 28-33-l.l(g), in the event that an employer controverts the employee’s claim for compensation, the employer must file a notice of controversy within fourteen days of the injury that gives rise to the claim. The notice of controversy relating to compensation for specific injuries or for medical expenses must be filed within ninety days or thirty days, respectively. When such notices have been filed in accordance with subsection (g), an informal hearing is required to be scheduled no later then two weeks following the date of filing of notice pursuant to § 28-33-l.l(i)(l).

This hearing will be conducted by a hearing officer employed by the department, whose duty it shall be to resolve controversies or misunderstandings and to render a preliminary determination. Moreover, at the hearing the hearing officer is not bound by formal rules of evidence. If the preliminary determination results in an order to pay compensation, payments shall commerce within fourteen days of said determination. Either party may file an appeal to the Workers’ Compensation Commission, which will then consider the matter de novo. Similar informal hearings are provided by § 28-33-l.l(i)(2) in cases wherein an employer files a notice of intent to discontinue, reduce, or suspend payments.

In respect to initial informal hearings, when an employee claims compensation and the employer files a notice of controversy, the department director is required by § 28-33-l.l(i)(l)(C) to assign an employee assistant to each case scheduled for informal hearing. The employee assistant is required by the subsection to be present at the informal hearing and to be available to assist the employee in preparation for and during the informal hearings. Either party may be represented or assisted by any person of his own choosing at his own expense. If the employer chooses to be represented by an attorney, the employee may also be represented by an attorney at the employer’s expense, whether or not the employee prevails. If both parties are represented by an attorney, the director shall determine the reasonable amount of the employee’s attorney’s fee, which will be paid by the employer. If the employer is not represented by an attorney, the employee may still elect to be represented by an attorney, but in such event, even if the employee prevails, the director shall determine a reasonable attorney’s fee to be paid by the employee.

In the course of proceedings in the Superior Court, evidence was adduced corcem-ing regulations of the Department of Workers’ Compensation and also a position description filed in the department of personnel which defined the duties of employee assistants as follows:

“To provide technical advice and assistance to various parties involving their rights and obligations under the Workers’ Compensation Act.

“To assist the injured employee in preparation for and at informal Workers’ Compensation hearings, and to help in providing the necessary documentation at said hearings.

“To provide both routine and technical advice and/or information to the general public regarding rights and responsibilities under the Workers’ Compensation Act.

“To attempt to settle disputes between injured workers, insurance companies, employers, purveyors of services, and any other interested parties prior to an informal hearing.

“To conduct in person interviews; both in office and field.

“To gather and prepare information necessary for use at informal hearings.

“To do related work as required.”

At the conclusion of the presentation of evidence and argument in the Superior Court, the trial justice held that the duties of the employee assistants constituted the practice of law under definitions recognized by this court in such prior cases as In re Rhode Island Bar Association, 106 R.I. 752, 263 A.2d 692 (1970), and Rhode Island Bar Association v. Automobile Service Association, 55 R.I. 122, 179 A. 139 (1935). There is no question that this court in an exhaustive opinion in Rhode Island Bar Association v. Automobile Service Association, cited with approval a definition of the practice of law formulated by the Supreme Court of South Carolina in In re Duncan, 83 S.C. 186, 189, 65 S.E. 210, 211 (1909), which was doubtless broad enough to comprehend the activities of the employee assistants at issue in the case at bar. Without quoting the language set forth in that case, we assert that this definition would include all the activities that have been prohibited by G.L. 1956 (1981 Reenactment) § 11-27-2, which purports to define the practice of law as well as activities enunciated in § 11-27-11, as amended by P.L. 1987, ch. 416, § 1, which presumes to permit certain practices to be performed by persons who are not members of the bar. It should be noted that § 11-27-11(10) also would have the effect of exempting employee assistants who act in accordance with their statutory authority from violating the prohibition of § 11-27-2.

It has long been the law of this state that the definition of the practice of law and the determination concerning who may practice law is exclusively within the province of this court and, further, that the Legislature may act in aid of this power but may not grant the right to anyone to practice law save in accordance with standards enunciated by this court. Berberian v. New England Telephone and Telegraph Co., 114 R.I. 197, 330 A.2d 813 (1975); In re Rhode Island Bar Association, 106 R.I. 752, 263 A.2d 692 (1970); Rhode Island Bar Association v. Automobile Service Association, 55 R.I. 122, 179 A. 139 (1935).

However, it should be noted that since 1935 the General Assembly has without interference by this court permitted a great many services that would have come within the definition of the practice of law to be performed by insurance adjusters, town clerks, bank employees, certified public accountants, interstate commerce practitioners, public accountants (other than certified public accountants), as well as employee assistants. The plain fact of the matter is that each of these exceptions enacted by the Legislature constituted a response to a public need. In each instance the Legislature determined that the persons authorized to carry out the permitted activities were qualified to do so. There seems no question that in certain types of tax matters certified public accountants and public accountants are highly qualified to advise on tax laws and to prepare tax returns. Indeed, many attomeys-at-law who are not tax specialists resort themselves to such individuals for tax advice.

We must remember that the practice of law at a given time cannot be easily defined. Nor should it be subject to such rigid and traditional definition as to ignore the public interest. Two recent cases are illustrative of the response in Colorado and Ohio to questions concerning unauthorized practice of law and are not dissimilar to the problem raised in the case at bar. In Unauthorized Practice of Law Committee v. Employers Unity, Inc., 716 P.2d 460 (Colo. 1986), the Supreme Court of Colorado was confronted with the issue of whether a group of individuals who were not members of the bar might be permitted to give advice to employers and employees concerning claims for unemployment compensation. These individuals not only prepare and file written documents, pleadings, and other legal forms, but also appear at hearings before referees of the Division of Employment and Training of the Colorado Department of Labor. The Colorado Supreme Court en banc accepted conclusions of law formulated by a special master who determined that the activities of these individuals fell within the definition of the practice of law. Nevertheless, the court also adopted the recommendations of the special master that the court should grant permission for lay persons to continue to represent others at hearings before such referees, “even though such representation constitutes practicing law.” 716 P.2d at 464. In a special concurring opinion Justice Erickson suggested that it was appropriate to grant permission in limited circumstances for lay persons to engage in activities that might be included within the definition of the practice of law “where there are few disputed legal principles and where the monetary amount in issue is too small to justify hiring an attorney.” Id. at 465.

In Henize v. Giles, 22 Ohio St.3d 213, 490 N.E.2d 585 (1986), a similar question was presented to the Supreme Court of Ohio concerning the propriety of nonlawyer representatives appearing at administrative unemployment-compensation hearings before the Ohio Bureau of Employment Services and the Unemployment Compensation Board of Review. The Supreme Court of Ohio, although reserving to itself, as did the Supreme Court of Colorado, the authority ultimately to control the practice of law, held that this practice should be permitted and expressed the following rationale for the determination:

“Although parties may choose to be represented by lawyers in these proceedings, the hard reality is that few employ legal counsel. This is due in part to the interest at stake, the regulations which understandably limit attorney fees and, most importantly, the fact that attorneys are simply not required in most of these claim reviews. This is because of the informality of the proceedings coupled with the recognition that, in most instances, a formal presentation of legal argument is not needed. Instead, the hearing is designed to be an administrative information gathering tool serving as an alternative to judicial resolution of every contested claim.

“Unquestionably, this court is the body which ultimately controls the practice of law in this state. Section 2(B)(1)(g), Article IV of the Ohio Constitution; R.C. 4705.01 * * * . With this authority is the concomitant responsibility to protect the public by preventing the unauthorized practice of law, while at the same time not exercising this authority so rigidly that the public good suffers.” 22 Ohio St. 3d at 217, 490 N.E.2d at 588-89.

The Ohio court considered that though such activities could arguably be viewed as the practice of law, the public interest dictated that lay representation should be permitted to assist parties in this context of informal hearings.

We recognize that in this case we are dealing, not with unemployment compensation hearings, but with employee claims for workers’ compensation. However, the legislative design for prompt, informal hearings in respect to disputed claims bears a strong resemblance to the unemployment-compensation hearings described in Colorado and Ohio. Generally, the monetary amount at stake in these proceedings will consist of small weekly sums and medical expenses. In the event that the employer chooses to be represented by an attorney, the employee will have the same privilege and, if he or she prevails, the employer will pay the counsel fee.

In instances in which the employer does not choose to be represented by counsel, the employee would be confronted with the not-inconsiderable problem of obtaining an attorney’s services at his own expense. In many instances doing so would not be practicable or feasible for the employee. The employee assistants provided by the statute would fill that gap in representation for the limited purpose of the informal hearing.

In the event that either party appeals and the matter is presented to the Workers’ Compensation Commission, then the employee and the employer will be represented by licensed attorneys.

We are of the opinion that the informal hearings, together with lay representation, may well serve the public interest. We concluded from the evidence introduced that the employee assistants will be adequately trained to carry out the relatively simple and repetitive functions which they will be called upon to perform. We do require, however, that in the event an employee is denied compensation at such a hearing the employee be given an opportunity to consult with an attorney of his choice in order to determine whether he or she will appeal to the Workers’ Compensation Commission. This consultation should be paid for at state expense at a reasonable fee to be determined by the director. In the event that an attorney chooses to represent the employee before the commission, such attorney would be paid by the employer if the employee prevails as presently provided by law. See G.L. 1956 (1986 Reenactment) § 28-35-32.

In authorizing the employee assistants to carry out the functions authorized by § 42-94-5, we are dealing with a question of first impression and are relying to a great extent upon the legislative findings that declare the necessity for an informal prompt hearing in the event of controversy. Therefore, this grant of authorization is made upon a somewhat experimental basis. Consequently we shall leave the matter open for the Unauthorized Practice of Law Committee to come again before the court in the event that the public, and particularly employees, are not adequately protected by the services of the employee assistants. Meanwhile the act may be implemented in the form in which it is presently cast, with the single modification set forth in this opinion.

For the reasons stated, the defendants’ appeal is sustained. The judgment of the Superior Court is reversed. The papers in the case may be remanded to the Superior Court with directions to enter judgment for the defendants but without prejudice to the plaintiff to bring a new complaint in the event that the public interest shall so warrant in the future, as indicated heretofore in this opinion.