How to deal with motions for sanctions

The practice of law, it seems, has become less courteous in recent years. Litigators, in particular, are finding new ways to aggressively and zealously serve their clients. Sometimes this manifests in motions for sanctions. Such motions can be warranted as a result of counsel's unprofessional conduct. Other times, litigators use motions for sanctions as a tactic to gain an advantage in litigation.

Most motions for sanctions arise out of disputes over discovery or allegations that litigation was filed frivolously. See Code of Civil Procedure Sections 128.5, 128.7 (outlining grounds and procedure for filing motion for sanctions based on bad faith or frivolous tactics). The impact on attorneys and their law practices can be significant.

Receiving a motion for sanctions can be a scary or even emotional event, regardless of whether the motion is brought against just the client or both the attorney and the client. However, there are certain steps that are recommended to help the recipient of such a motion comply with all ethical obligations and assist with a reasoned response.

Who's in Charge?

Most firms facing a motion for sanctions will immediately designate a risk management partner or someone from the general counsel's office to decide the appropriate actions that follow. Motions for sanctions implicate a variety of issues, and rather than have a fool for a client, most attorneys consider putting their trust in someone detached from the situation to address them.

Telling the Client

In dealing with a motions for sanctions, a potential conflict may arise between the attorney and the client. For example, if opposing counsel seeks sanctions against the client for actions of the attorney, an issue could arise regarding whether the client might have a claim against the attorney should sanctions be imposed. Likewise, if opposing counsel seeks sanctions against both the attorney and the client, an issue may arise as to whether the conduct at issue is the client's, the attorney's, or both.

Most often, the attorney may continue to act on behalf of the client (and the law practice, if the movant seek sanctions against both). However, there are additional considerations that impact such a decision.

1. Disclosure. No matter how frivolous, every motion, demand or action seeking a recovery from a client should be reported to the client. See California Rule of Professional Conduct 3-500 (noting counsel's obligation to keep clients informed); Cal. Business and Professions Code Section 6068(m) (same). The State Bar of California also advises attorneys to inform the client of the motion for sanctions: "[A]t a minimum, the lawyer must inform the client of the existence of the motion, the fact that sanctions are being sought against the client and the lawyer, the amount of the sanctions being sought and the practical consequences of the motion if it is granted or it is denied." Cal. Standing Comm. on Prof'l Responsibility & Conduct, Formal Opinion No. 1997-151.

By notifying the client of the motion, the client has the opportunity to get advice and can also decide what, if anything, should be done.

2. Provide information to the client. What practical advice to give the client will depend on the substance of the allegations. Indeed, "[t]he lawyer also has a duty to supply the client with additional information necessary to permit the client to make informed decisions with respect to the motion." Id.

For most situations, this may involve telling the client that the motion appears to be a litigation tactic (if that is the case) or explaining the risk that the motion will be granted. Many firms facing this issue will also consider whether there are other options for the client, such as conceding the relevant discovery, fighting the motion on its merits, or using additional counsel to address sanctions. Candor is a helpful tool here that will help rebut any future allegations that the attorney was considering her own interests ahead of the client's.

3. Record the plan. When facing this issue, most firms will document the client's decision in writing to avoid any confusion. The confirmation can even include an agreement regarding how any order to pay sanctions will be addressed: "The attorney and client may agree in advance how to allocate their respective responsibility for paying any such award, provided there is adequate disclosure to the client and the agreement is ethical under the circumstances in which the sanctions are imposed." Id.

Report to the Carrier

By providing notice of the motion to the law practice's legal malpractice insurance company, the law practice has taken a step to assure that any coverage that might exist will be available in the event that the motion results in an actual obligation to pay or other finding that the attorney engaged in misconduct. Although not all policies will require this option, many choose to err on the side of reporting.

Investigate the Allegations

The designated risk management partner may also consider opening a separate file within the firm to evaluate the risks to the law practice. By segregating this issue from the client file, the firm can help maintain its own privilege with its risk management partner or other in-house counsel.

In investigating the allegations, the risk management partner may determine that there are risks to the law practice - whether in an award of sanctions or in allegations from the client - that warrant more aggressive steps.

Consider Outside Counsel

If appropriate, the risk management partner may want to retain independent counsel to represent the law practice in connection with the motion for sanctions. This is especially true if the law practice's conduct is at issue. Using outside counsel can also help protect the law practice from having to serve both as an advocate and a witness. It can also help the law practice avoid a conflict with the client.