text:
If the court finds that one or more of the events stated in Section 6180 has occurred, and that supervision of the courts is warranted because the affected attorney has left an unfinished client matter for which no other active licensee of the State Bar has with consent of the client agreed to assume responsibility, or that the interest of one or more of the clients of the attorney or one or more other interested persons or entities will be prejudiced if the proceeding herein provided is not maintained, it may make an order assuming jurisdiction over the attorney’s practice pursuant to this article. If the person to whom the order to show cause is directed does not appear the court may make its order upon the verified application or such proof as it may require. Thereupon the court shall appoint one or more active licensees of the State Bar to act under its direction to mail a notice of cessation of law practice pursuant to Section 6180.1 and may order such appointed attorneys to do one or more of the following:

(a) Examine the files and records of the law practice, and obtain information as to any pending matters which may require attention.

(b) Notify persons and entities who appear to be clients of the attorney of the occurrence of the event or events stated in Section 6180 and inform them that it may be to their best interest to obtain other legal counsel.

(c) Apply for an extension of time pending employment of such other counsel by the client.

(d) With the consent of the client, file notices, motions and pleadings on behalf of the client where jurisdictional time limits are involved and other legal counsel has not yet been obtained.

(e) Give notice to the depositor and appropriate persons and entities who may be affected, other than clients, of the occurrence of such event or events.

(f) Arrange for the surrender or delivery of clients’ papers or property.

(g) Arrange for the appointment of a receiver, where applicable, to take possession and control of any and all bank accounts relating to the affected attorney’s practice of law, including the general or office account and the clients’ trust account.

(h) Do such other acts as the court may direct to carry out the purposes of this article.

The court shall have jurisdiction over the files and records and law practice of the affected attorney for the limited purposes of this section, and may make all orders necessary or appropriate to exercise this jurisdiction. The court shall provide a copy of any order issued pursuant to this article to the Office of the Chief Trial Counsel of the State Bar.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 130. (AB 3249) Effective January 1, 2019.)


kind: section

code: BPC

text: Nothing in this article shall authorize the court or an attorney appointed by it pursuant to this article to approve or disapprove of the employment of legal counsel, fix terms of legal employment, fix the compensation which may have been earned by the affected attorney, or supervise or in any way to undertake to conduct the law practice except to the limited extent provided by subdivisions (c) and (d) of Section 6180.5.

history: (History: Amended by Stats. 1992, Ch. 156, Sec. 3. Effective January 1, 1993.)

division: 3. PROFESSIONS AND VOCATIONS GENERALLY

chapter: 4. Attorneys

path: 3. PROFESSIONS AND VOCATIONS GENERALLY > 4. Attorneys > 11. Cessation of Law Practice—Jurisdiction of Courts


text: Unless court approval is first obtained, neither the attorney appointed pursuant to this article nor his corporation nor any partners or associates of the attorney shall accept employment as an attorney by any client of the affected attorney on any matter pending at the time of the appointment. Action taken pursuant to subdivisions (c) and (d) of Section 6180.5 shall not be deemed such employment.

history: (History: Amended by Stats. 1992, Ch. 156, Sec. 4. Effective January 1, 1993.)

article: 11. Cessation of Law Practice—Jurisdiction of Courts


text: Upon a finding by the court that it is more likely than not that the application will be granted and that delay in making the orders described in Section 6180.5 will result in substantial injury to clients, or to others, the court, without notice or upon such notice as it shall prescribe, may make interim orders containing such provisions as the court deems appropriate under the circumstances. Such order shall be served in the manner provided in Section 6180.4, and if the application and order to show cause have not yet been served, they shall be served at the time of serving the order made pursuant to this section.

history: (History: Added by Stats. 1974, Ch. 589.)


text: If there is a pending proceeding in probate, guardianship, or conservatorship relating to the affected attorney, the court having jurisdiction pursuant to this article may inquire into acts done by the legal representative of the attorney concerning the law practice. Upon reasonable notice to the legal representative, the court may determine that the acts of the legal representative relating to such law practice shall be subject to its orders pursuant to this article.


text: Persons examining the files and records of the law practice of the affected attorney pursuant to this article shall observe the lawyer-client privilege and shall make disclosure only to the extent necessary to carry out the purposes of this article. Such disclosure is a disclosure which is reasonably necessary for the accomplishment of the purpose for which the affected attorney was consulted. The appointment of such licensee of the State Bar shall not affect the lawyer-client privilege which privilege shall apply to communications by or to the appointed lawyers to the same extent as it would have applied to communications by or to the affected attorney.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 131. (AB 3249) Effective January 1, 2019.)


text: No person or entity shall incur any liability by reason of the institution or maintenance of the proceeding. No person shall incur any liability for any act done or omitted to be done pursuant to order of the court under this article. No person or entity shall be liable for failure to apply for court jurisdiction under this article. Nothing in this section shall affect any obligation otherwise existing between the affected attorney and any other person or entity.

history: (History: Amended by Stats. 1985, Ch. 453, Sec. 20.)


text: A licensee of the State Bar appointed pursuant to Section 6180.5 shall serve without compensation. However, the licensee may be paid reasonable compensation by the State Bar in cases where the State Bar has determined that the licensee has devoted extraordinary time and services which were necessary to the performance of the licensee’s duties under this article. All payments of compensation for time and services shall be at the discretion of the State Bar. Any licensee shall be entitled to reimbursement from the State Bar for necessary expenses incurred in the performance of the licensee’s duties under this article. Upon court approval of expenses or compensation for time and services, the State Bar shall be entitled to reimbursement therefor from the affected attorney or his or her estate.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 132. (AB 3249) Effective January 1, 2019.)


text: An order made pursuant to this article is nonappealable, and shall not be stayed by petition for a writ except as ordered by the superior court or the appellate court.


text: As used in this article, “attorney” means a licensee or former licensee of the State Bar; “law practice” means (a) a law practice conducted by an individual; (b) a law practice conducted by a partnership, if Section 6180 applies to all partners; and (c) a law practice conducted by a law corporation, if Section 6180 applies to all shareholders of the corporation or if the corporation is described in subdivision (b) of Section 13406 of the Corporations Code. This article does not apply to legal services rendered as an employee, or under a contract which does not create the relationship of lawyer and client.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 133. (AB 3249) Effective January 1, 2019.)


citation: BPC § 6185

text:
(a) Upon appointment by the superior court pursuant to Section 2468, 9764, or paragraph (22) or (23) of subdivision (b) of Section 17200 of the Probate Code, a practice administrator, who is an active licensee of the State Bar, may be granted, by order of the court appointing this person, one or more of the following powers to take control of the practice of a deceased or disabled licensee of the State Bar of California:

(1) Take control of all operating and client trust accounts, business assets, equipment, client directories, and premises that were used in the conduct of the deceased or disabled licensee’s practice.

(2) Take control and review all client files of the deceased or disabled licensee.

(3) Contact each client of the deceased or disabled licensee who can be reasonably ascertained and located to inform the client of the condition of the licensee and of the appointment of a practice administrator. The practice administrator may discuss various options for the selection of successor counsel with the client.

(4) In each case that is pending before any court or administrative body, notify the appropriate court or administrative body and contact opposing counsel in the cases under the control of the deceased or disabled licensee and obtain additional time for new counsel to appear for the affected client.

(5) Determine the liabilities of the practice and pay them for the assets of the practice. If the assets of the practice are insufficient to pay these obligations or for the expenses incurred by the practice administrator to carry out the powers ordered pursuant to this section, the practice administrator shall apply to the personal representative to obtain the additional funds that may be required. If the personal representative and the practice administrator are unable to agree on the amount that is necessary for the practice administrator to undertake the duties ordered pursuant to this paragraph, either party may apply to the court having jurisdiction over the estate of the deceased or disabled licensee for an order requesting funds from the estate.

(6) Employ any person, including but not limited to the employees of the deceased or disabled licensee, who may be necessary to assist the practice administrator in the management, winding up, and disposal of the practice.

(7) Create a plan for disposition of the practice of the deceased or disabled licensee to protect its value as an asset of the estate of the licensee. Subject to the approval of the personal representative of the estate, agree to the sale of the practice and its goodwill.

(8) Subject to the approval of the personal representative of the estate, reach agreements with successor counsel for division of fees for work in process on the cases of the deceased or disabled licensee.

(9) Subject to the prohibitions against soliciting cases, the practice administrator may act as successor counsel for a client of the deceased or disabled licensee.

(b) If the practice administrator is uncertain as to how to proceed with the powers granted pursuant to this section, he or she may apply to the Superior Court that has jurisdiction over the estate of the deceased or disabled licensee for instructions.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 134. (AB 3249) Effective January 1, 2019.)


citation: BPC § 6190

text: The courts of the state shall have the jurisdiction as provided in this article when an attorney engaged in the practice of law in this state has, for any reason, including but not limited to excessive use of alcohol or drugs, physical or mental illness, or other infirmity or other cause, become incapable of devoting the time and attention to, and providing the quality of service for, his or her law practice which is necessary to protect the interest of a client if there is an unfinished client matter for which no other active licensee of the State Bar, with the consent of the client, has agreed to assume responsibility.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 135. (AB 3249) Effective January 1, 2019.)

path: 3. PROFESSIONS AND VOCATIONS GENERALLY > 4. Attorneys > 12. Incapacity to Attend to Law Practice—Jurisdiction of Courts


text:
(a) An application for assumption by the court of jurisdiction under this article shall be made to the superior court for the county where the attorney maintains or most recently has maintained his or her principal office for the practice of law or where such attorney resides. The court may assume jurisdiction over the law practice of an attorney to the extent provided in Article 11 (commencing with Section 6180) of Chapter 4 of Division 3.

(b) Where an attorney consents to the assumption by the court of jurisdiction under the article, the State Bar, a client, or an interested person or entity may apply to the court for assumption of jurisdiction over the law practice of the attorney. In any proceeding under this subdivision, the State Bar shall be permitted to intervene and to assume primary responsibility for conducting the action.

(c) Where an attorney does not consent to the assumption by the court of jurisdiction under this article, only the State Bar may apply to the court for assumption of jurisdiction over the law practice of the attorney.

(d) The chief trial counsel may appoint, pursuant to rules adopted by the board of trustees, an examiner or coexaminer from among the licensees of the State Bar in an investigation or formal proceeding under this article.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 136. (AB 3249) Effective January 1, 2019.)

article: 12. Incapacity to Attend to Law Practice—Jurisdiction of Courts


text:
The application shall be verified and shall state facts showing each of the following:

(a) Probable cause to believe that the facts set forth in Section 6190 have occurred.

(b) The interest of the applicant.

(c) Probable cause to believe that the interests of the client or of an interested person or entity will be prejudiced if the proceeding herein provided is not maintained.

history: (History: Amended by Stats. 1989, Ch. 582, Sec. 6. Effective September 21, 1989.)


text: The application shall be set for hearing. A copy of the application and notice of the hearing shall be served upon the attorney by personal delivery or, as an alternate method of service, by certified or registered mail, return receipt requested, addressed to the attorney at the latest address shown on the official licensing records of the State Bar. Service is complete at the time of mailing, but any prescribed period of notice and any right or duty to do any act or make any response within that prescribed period or on a date certain after notice is served by mail shall be extended five days if the place of address is within the State of California, 10 days if the place of address is outside the State of California but within the United States, and 20 days if the place of address is outside the United States. If the attorney has a guardian or conservator, copies shall also be served upon such fiduciary in similar manner. If the State Bar is not an applicant, copies shall also be served upon the Office of the Chief Trial Counsel of the State Bar in similar manner at the time of service on the attorney. The court may prescribe additional or alternative methods of service of the application and notice, and may prescribe methods of notifying and serving notices and process upon other persons and entities in cases not specifically provided for herein.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 137. (AB 3249) Effective January 1, 2019.)


text: The provisions of Article 11 (commencing with Section 6180) of Chapter 4 of Division 3 of this code shall apply to the proceeding, whenever possible.

history: (History: Added by Stats. 1975, Ch. 387.)


text: The proceeding may be maintained concurrently with a disciplinary investigation or proceeding provided for by this chapter.


text: Upon motion duly made by any interested party, the court may terminate the proceedings.


text: If the court finds that (a) the facts set forth in Section 6190 have occurred and, (b) that the interests of the client, or of an interested person or entity will be prejudiced if the proceeding provided herein is not maintained, the court shall order the applicant to mail a notice of cessation of law practice pursuant to Section 6180.1 and may make all orders provided for by the provisions of Article 11 (commencing with Section 6180) of Chapter 4 of Division 3. The court shall provide a copy of any order issued pursuant to this article to the Office of the Chief Trial Counsel of the State Bar.

history: (History: Amended by Stats. 1992, Ch. 156, Sec. 5. Effective January 1, 1993.)


citation: BPC § 6200

text:
(a) The board of trustees shall, by rule, establish, maintain, and administer a system and procedure for the arbitration, and may establish, maintain, and administer a system and procedure for mediation of disputes concerning fees, costs, or both, charged for professional services by licensees of the State Bar or by members of the bar of other jurisdictions. The rules may include provision for a filing fee in the amount as the board may, from time to time, determine.

(b) This article shall not apply to any of the following:

(1) Disputes where a licensee of the State Bar of California is also admitted to practice in another jurisdiction or where an attorney is only admitted to practice in another jurisdiction, and the attorney maintains no office in the State of California, and no material portion of the services were rendered in the State of California.

(2) Claims for affirmative relief against the attorney for damages or otherwise based upon alleged malpractice or professional misconduct, except as provided in subdivision (a) of Section 6203.

(3) Disputes where the fee or cost to be paid by the client or on the client’s behalf has been determined pursuant to statute or court order.

(c) Unless the client has agreed in writing to arbitration under this article of all disputes concerning fees, costs, or both, arbitration under this article shall be voluntary for a client and shall be mandatory for an attorney if commenced by a client. Mediation under this article shall be voluntary for an attorney and a client.

(d) The board of trustees shall adopt rules to allow arbitration and mediation of attorney fee and cost disputes under this article to proceed under arbitration and mediation systems sponsored by local bar associations in this state. Rules of procedure promulgated by local bar associations are subject to review by the board or a committee designated by the board to ensure that they provide for a fair, impartial, and speedy hearing and award.

(e) In adopting or reviewing rules of arbitration under this section, the board shall provide that the panel shall include one attorney member whose area of practice is either, at the option of the client, civil law, if the attorney’s representation involved civil law, or criminal law, if the attorney’s representation involved criminal law, as follows:

(1) If the panel is composed of three members the panel shall include one attorney member whose area of practice is either, at the option of the client, civil or criminal law, and shall include one lay member.

(2) If the panel is composed of one member, that member shall be an attorney whose area of practice is either, at the option of the client, civil or criminal law.

(f) In any arbitration or mediation conducted pursuant to this article by the State Bar or by a local bar association, pursuant to rules of procedure approved by the board of trustees, an arbitrator or mediator, as well as the arbitrating association and its directors, officers, and employees, shall have the same immunity that attaches in judicial proceedings.

(g) In the conduct of arbitrations under this article the arbitrator or arbitrators may do all of the following:

(1) Take and hear evidence pertaining to the proceeding.

(2) Administer oaths and affirmations.

(3) Issue subpoenas for the attendance of witnesses and the production of books, papers, and documents pertaining to the proceeding.

(h) Participation in mediation is a voluntary consensual process, based on direct negotiations between the attorney and client, and is an extension of the negotiated settlement process. All discussions and offers of settlement are confidential and shall not be disclosed pursuant to any state law, including, but not limited to, the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), and may not be disclosed in any subsequent arbitration or other proceedings.

history: (History: Amended by Stats. 2021, Ch. 615, Sec. 21. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)

article: 13. Arbitration of Attorney’s Fees

path: 3. PROFESSIONS AND VOCATIONS GENERALLY > 4. Attorneys > 13. Arbitration of Attorney’s Fees


citation: BPC § 6201

text:
(a) The rules adopted by the board of trustees shall provide that an attorney shall forward a written notice to the client prior to or at the time of service of summons or claim in an action against the client, or prior to or at the commencement of any other proceeding against the client under a contract between attorney and client which provides for an alternative to arbitration under this article, for recovery of fees, costs, or both. The written notice shall be in the form that the board of trustees prescribes, and shall include a statement of the client’s right to arbitration under this article. Failure to give this notice shall be a ground for the dismissal of the action or other proceeding. The notice shall not be required, however, prior to initiating mediation of the dispute.

The rules adopted by the board of trustees shall provide that the client’s failure to request arbitration within 30 days after receipt of notice from the attorney shall be deemed a waiver of the client’s right to arbitration under the provisions of this article.

(b) If an attorney, or the attorney’s assignee, commences an action in any court or any other proceeding and the client is entitled to maintain arbitration under this article, and the dispute is not one to which subdivision (b) of Section 6200 applies, the client may stay the action or other proceeding by serving and filing a request for arbitration in accordance with the rules established by the board of trustees pursuant to subdivision (a) of Section 6200. The request for arbitration shall be served and filed prior to the filing of an answer in the action or equivalent response in the other proceeding; failure to so request arbitration prior to the filing of an answer or equivalent response shall be deemed a waiver of the client’s right to arbitration under the provisions of this article if notice of the client’s right to arbitration was given pursuant to subdivision (a).

(c) Upon filing and service of the request for arbitration, the action or other proceeding shall be automatically stayed until the award of the arbitrators is issued or the arbitration is otherwise terminated. The stay may be vacated in whole or in part, after a hearing duly noticed by any party or the court, if and to the extent the court finds that the matter is not appropriate for arbitration under the provisions of this article. The action or other proceeding may thereafter proceed subject to the provisions of Section 6204.

(d) A client’s right to request or maintain arbitration under the provisions of this article is waived by the client commencing an action or filing any pleading seeking either of the following:

(1) Judicial resolution of a fee dispute to which this article applies.

(2) Affirmative relief against the attorney for damages or otherwise based upon alleged malpractice or professional misconduct.

(e) If the client waives the right to arbitration under this article, the parties may stipulate to set aside the waiver and to proceed with arbitration.

history: (History: Amended by Stats. 2011, Ch. 417, Sec. 56. (SB 163) Effective January 1, 2012.)

article: 13. Arbitration of Attorney’s Fees


citation: BPC § 6202

text: The provisions of Article 3 (commencing with Section 950) of Chapter 4 of Division 8 of the Evidence Code shall not prohibit the disclosure of any relevant communication, nor shall the provisions of Chapter 4 (commencing with Section 2018.010) of Title 4 of Part 4 of the Code of Civil Procedure be construed to prohibit the disclosure of any relevant work product of the attorney in connection with: (a) an arbitration hearing or mediation pursuant to this article; (b) a trial after arbitration; or (c) judicial confirmation, correction, or vacation of an arbitration award. In no event shall such disclosure be deemed a waiver of the confidential character of such matters for any other purpose.

history: (History: Amended by Stats. 2004, Ch. 182, Sec. 1. Effective January 1, 2005. Operative July 1, 2005, by Sec. 64 of Ch. 182.)

article: 13. Arbitration of Attorney’s Fees


citation: BPC § 6203

text:
(a) The award shall be in writing and signed by the arbitrators concurring therein. It shall include a determination of all the questions submitted to the arbitrators, the decision of which is necessary in order to determine the controversy. The award shall not include any award to either party for costs or attorney’s fees incurred in preparation for or in the course of the fee arbitration proceeding, notwithstanding any contract between the parties providing for such an award or costs or attorney’s fees. However, the filing fee paid may be allocated between the parties by the arbitrators. This section shall not preclude an award of costs or attorney’s fees to either party by a court pursuant to subdivision (c) of this section or of subdivision (d) of Section 6204. The State Bar, or the local bar association delegated by the State Bar to conduct the arbitration, shall deliver to each of the parties with the award, an original declaration of service of the award.

Evidence relating to claims of malpractice and professional misconduct, shall be admissible only to the extent that those claims bear upon the fees, costs, or both, to which the attorney is entitled. The arbitrators shall not award affirmative relief, in the form of damages or offset or otherwise, for injuries underlying the claim. Nothing in this section shall be construed to prevent the arbitrators from awarding the client a refund of unearned fees, costs, or both previously paid to the attorney.

(b) Even if the parties to the arbitration have not agreed in writing to be bound, the arbitration award shall become binding upon the passage of 30 days after service of notice of the award, unless a party has, within the 30 days, sought a trial after arbitration pursuant to Section 6204. If an action has previously been filed in any court, any petition to confirm, correct, or vacate the award shall be to the court in which the action is pending, and may be served by mail on any party who has appeared, as provided in Chapter 4 (commencing with Section 1003) of Title 14 of Part 2 of the Code of Civil Procedure; otherwise it shall be in the same manner as provided in Chapter 4 (commencing with Section 1285) of Title 9 of Part 3 of the Code of Civil Procedure. If no action is pending in any court, the award may be confirmed, corrected, or vacated by petition to the court having jurisdiction over the amount of the arbitration award, but otherwise in the same manner as provided in Chapter 4 (commencing with Section 1285) of Title 9 of Part 3 of the Code of Civil Procedure.

(c) Neither party to the arbitration may recover costs or attorney’s fees incurred in preparation for or in the course of the fee arbitration proceeding with the exception of the filing fee paid pursuant to subdivision (a) of this section. However, a court confirming, correcting, or vacating an award under this section may award to the prevailing party reasonable fees and costs incurred in obtaining confirmation, correction, or vacation of the award including, if applicable, fees and costs on appeal. The party obtaining judgment confirming, correcting, or vacating the award shall be the prevailing party except that, without regard to consideration of who the prevailing party may be, if a party did not appear at the arbitration hearing in the manner provided by the rules adopted by the board of trustees, that party shall not be entitled to attorney’s fees or costs upon confirmation, correction, or vacation of the award.

(d) (1) In any matter arbitrated under this article in which the award is binding or has become binding by operation of law or has become a judgment either after confirmation under subdivision (c) or after a trial after arbitration under Section 6204, or in any matter mediated under this article, if: (A) the award, judgment, or agreement reached after mediation includes a refund of fees or costs, or both, to the client and (B) the attorney has not complied with that award, judgment, or agreement the State Bar shall enforce the award, judgment, or agreement by placing the attorney on involuntary inactive status until the refund has been paid.

(2) The State Bar shall provide for an administrative procedure to determine whether an award, judgment, or agreement should be enforced pursuant to this subdivision. An award, judgment, or agreement shall be so enforced if:

(A) The State Bar shows that the attorney has failed to comply with a binding fee arbitration award, judgment, or agreement rendered pursuant to this article.

(B) The attorney has not proposed a payment plan acceptable to the client or the State Bar.

However, the award, judgment, or agreement shall not be so enforced if the attorney has demonstrated that he or she (i) is not personally responsible for making or ensuring payment of the refund, or (ii) is unable to pay the refund.

(3) An attorney who has failed to comply with a binding award, judgment, or agreement shall pay administrative penalties or reasonable costs, or both, as directed by the State Bar. Penalties imposed shall not exceed 20 percent of the amount to be refunded to the client or one thousand dollars ($1,000), whichever is greater. Any penalties or costs, or both, that are not paid shall be added to the license fee of the attorney for the next calendar year.

(4) The board shall terminate the inactive enrollment upon proof that the attorney has complied with the award, judgment, or agreement and upon payment of any costs or penalties, or both, assessed as a result of the attorney’s failure to comply.

(5) A request for enforcement under this subdivision shall be made within four years from the date (A) the arbitration award was mailed, (B) the judgment was entered, or (C) the date the agreement was signed. In an arbitrated matter, however, in no event shall a request be made prior to 100 days from the date of the service of a signed copy of the award. In cases where the award is appealed, a request shall not be made prior to 100 days from the date the award has become final as set forth in this section.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 139. (AB 3249) Effective January 1, 2019.)

article: 13. Arbitration of Attorney’s Fees


citation: BPC § 6204

text:
(a) The parties may agree in writing to be bound by the award of arbitrators appointed pursuant to this article at any time after the dispute over fees, costs, or both, has arisen. In the absence of such an agreement, either party shall be entitled to a trial after arbitration if sought within 30 days, pursuant to subdivisions (b) and (c), except that if either party willfully fails to appear at the arbitration hearing in the manner provided by the rules adopted by the board of trustees, that party shall not be entitled to a trial after arbitration. The determination of willfulness shall be made by the court. The party who failed to appear at the arbitration shall have the burden of proving that the failure to appear was not willful. In making its determination, the court may consider any findings made by the arbitrators on the subject of a party’s failure to appear.

(b) If there is an action pending, the trial after arbitration shall be initiated by filing a rejection of arbitration award and request for trial after arbitration in that action within 30 days after service of notice of the award. If the rejection of arbitration award has been filed by the plaintiff in the pending action, all defendants shall file a responsive pleading within 30 days following service upon the defendant of the rejection of arbitration award and request for trial after arbitration. If the rejection of arbitration award has been filed by the defendant in the pending action, all defendants shall file a responsive pleading within 30 days after the filing of the rejection of arbitration award and request for trial after arbitration. Service may be made by mail on any party who has appeared; otherwise service shall be made in the manner provided in Chapter 4 (commencing with Section 413.10) of Title 5 of Part 2 of the Code of Civil Procedure. Upon service and filing of the rejection of arbitration award, any stay entered pursuant to Section 6201 shall be vacated, without the necessity of a court order.

(c) If no action is pending, the trial after arbitration shall be initiated by the commencement of an action in the court having jurisdiction over the amount of money in controversy within 30 days after service of notice of the award. After the filing of such an action, the action shall proceed in accordance with the provisions of Part 2 (commencing with Section 307) of the Code of Civil Procedure, concerning civil actions generally.

(d) The party seeking a trial after arbitration shall be the prevailing party if that party obtains a judgment more favorable than that provided by the arbitration award, and in all other cases the other party shall be the prevailing party. The prevailing party may, in the discretion of the court, be entitled to an allowance for reasonable attorney’s fees and costs incurred in the trial after arbitration, which allowance shall be fixed by the court. In fixing the attorney’s fees, the court shall consider the award and determinations of the arbitrators, in addition to any other relevant evidence.

(e) Except as provided in this section, the award and determinations of the arbitrators shall not be admissible nor operate as collateral estoppel or res judicata in any action or proceeding.

history: (History: Amended by Stats. 2011, Ch. 417, Sec. 58. (SB 163) Effective January 1, 2012.)

article: 13. Arbitration of Attorney’s Fees


text:
(a) The State Bar shall provide by rule for an appropriate procedure to disqualify an arbitrator or mediator upon request of either party.

(b) The State Bar, or the local bar association delegated by the State Bar to conduct the arbitration, shall deliver a notice to the parties advising them of their rights to judicial relief subsequent to the arbitration proceeding.

history: (History: Amended by Stats. 1996, Ch. 1104, Sec. 17. Effective January 1, 1997.)

article: 13. Arbitration of Attorney’s Fees


citation: BPC § 6206

text: The time for filing a civil action seeking judicial resolution of a dispute subject to arbitration under this article shall be tolled from the time an arbitration is initiated in accordance with the rules adopted by the board of trustees until (a) 30 days after receipt of notice of the award of the arbitrators, or (b) receipt of notice that the arbitration is otherwise terminated, whichever comes first. Arbitration shall not be commenced under this article if a civil action requesting the same relief would be barred by Title 2 (commencing with Section 312) of Part 2 of the Code of Civil Procedure; provided that this limitation shall not apply to a request for arbitration by a client, pursuant to subdivision (b) of Section 6201, following the commencement of an action in any court or any other proceeding by the attorney.

history: (History: Amended by Stats. 2019, Ch. 13, Sec. 1. (AB 692) Effective January 1, 2020.)

article: 13. Arbitration of Attorney’s Fees


citation: BPC § 6210

text: The Legislature finds that, due to insufficient funding, existing programs providing free legal services in civil matters to indigent persons, especially underserved client groups, such as the elderly, the disabled, juveniles, and non-English-speaking persons, do not adequately meet the needs of these persons. It is the purpose of this article to expand the availability and improve the quality of existing free legal services in civil matters to indigent persons, and to initiate new programs that will provide services to them. The Legislature finds that the use of funds collected by the State Bar pursuant to this article for these purposes is in the public interest, is a proper use of the funds, and is consistent with essential public and governmental purposes in the judicial branch of government. The Legislature further finds that the expansion, improvement, and initiation of legal services to indigent persons will aid in the advancement of the science of jurisprudence and the improvement of the administration of justice.

history: (History: Added by Stats. 1981, Ch. 789, Sec. 1.)

path: 3. PROFESSIONS AND VOCATIONS GENERALLY > 4. Attorneys > 14. Funds for the Provision of Legal Services to Indigent Persons


text:
(a) There shall be created, within the State Bar, a Legal Services Trust Fund Commission to administer IOLTA accounts, Equal Access Funds, or similar funds or grant moneys intended for the support of qualified legal services projects and qualified support centers, as those terms are defined in Section 6213.

(b) (1) The Legal Services Trust Fund Commission shall be comprised of 24 commissioners as follows:

(A) Six commissioners shall be appointed by the State Bar Board of Trustees.

(B) Two commissioners shall be appointed by the Senate Committee on Rules.

(C) Two commissioners shall be appointed by the Speaker of the Assembly.

(D) Ten commissioners shall be appointed by the Chair of the Judicial Council, of which three shall be nonvoting judicial advisors. The three nonvoting judicial advisors shall be comprised of two superior court judges and one appellate justice.

(E) Four commissioners shall be appointed by the Legal Services Trust Fund Commission, of which at least two shall be, or have been within five years of appointment, indigent persons as defined by Section 6213.

(2) No employee or independent contractor acting as a consultant to a potential recipient of Legal Services Trust Fund grants shall be appointed to the Legal Services Trust Fund Commission. All commissioners shall be designated employees under the Conflict of Interest Code of the State Bar.

(3) Except as provided in paragraph (4), each commissioner shall serve for a term of four years that begins upon appointment. Upon completion of an initial term, a commissioner may be reappointed for a second four-year term. An initial or second term may be extended by one or two years, for a maximum of 10 years, to allow a commissioner to serve as chair or vice chair. A commissioner currently serving as of January 1, 2022, may be reappointed to two additional full terms following the completion of their current term pursuant to paragraph (5).

(4) A commissioner appointed by the chair of the Judicial Council shall have no term limits.

(5) Each commissioner shall serve at the pleasure of the appointing entity. Each appointing entity may stagger their appointments so one-half of the commissioners are appointed in 2022 and the other one-half are appointed in 2023. A commissioner serving as of January 1, 2022, may continue to serve until replaced by the appointing entity or January 1, 2024, whichever occurs first.

(6) Commissioners who are not currently and have never been attorneys licensed in California or another jurisdiction and who submit a form designated by the commission to request a per diem shall be entitled to receive fifty dollars ($50) per day for each day that they attend a commission meeting of at least one hour in length.

(c) The chair and the vice chair of the Legal Services Trust Fund Commission shall be selected by the Chair of the Judicial Council. The chair of the Legal Services Trust Fund Commission shall preside over the commission’s meetings. The Chair of the Judicial Council may select up to two chairs and two vice chairs to lead the commission.

(d) The Legal Services Trust Fund Commission shall be subject to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).

(e) (1) The Legal Services Trust Fund Commission shall recommend to the Board of Trustees of the State Bar rules to determine an applicant’s eligibility for grants under this article and for rules related to grant administration, including rules to monitor and evaluate a recipient’s compliance with Legal Services Trust Fund requirements and grant terms based on criteria established by the Legal Services Trust Fund Commission.

(2) The Legal Services Trust Fund Commission shall recommend to the Board of Trustees of the State Bar the amount proposed to be made available for grant distribution from IOLTA funds, along with the amount to be maintained as a fiscally responsible reserve.

(3) The Board of Trustees of the State Bar shall approve each recommendation made pursuant to paragraphs (1) and (2) unless the Board of Trustees of the State Bar makes a finding in writing that a recommendation conflicts with a statutory, fiduciary, or legal obligation of the State Bar.

(4) The decisions of the Legal Services Trust Fund Commission regarding individual grant awards shall take effect without approval by the Board of Trustees of the State Bar. However, the board may reverse or modify an individual grant award if it makes a finding in writing that the award violates Legal Services Trust Fund rules or a statutory, fiduciary, or legal obligation of the State Bar.

(f) Except as provided by subdivision (a) of Section 6033 and by Section 6140.03, the State Bar’s actual administrative costs to administer the Legal Services Trust Fund Program, including IOLTA, Equal Access Funds, and similar funds and grant moneys shall be fully funded through these grant programs. The State Bar shall not provide administrative services to the Legal Services Trust Fund Commission in excess of the administrative costs allocated to the State Bar by the Legislature, or by the Legal Services Trust Fund Commission as part of any request by the Legal Services Trust Fund Commission’s request for administrative support.

(g) At the conclusion of each fiscal year, the Legal Services Trust Fund Commission shall include a report of receipts of funds under this article, expenditures for administrative costs, and disbursements of the funds on a county-by-county basis, in the annual report of the State Bar’s receipts and expenditures required pursuant to Section 6145. To ensure that awards made by the Legal Services Trust Fund Commission are consistent with statute, rules, and other governing authority, the State Bar shall develop a program to audit a representative sample of grant awards each year. The results of the most recent audit shall be included with the report of receipt of funds described in this subdivision.

(h) This section supersedes any conflicting State Bar rules regarding the Legal Services Trust Fund Commission or its responsibilities or oversight by the State Bar’s board of trustees.

history: (History: Amended by Stats. 2022, Ch. 28, Sec. 10. (SB 1380) Effective January 1, 2023.)

article: 14. Funds for the Provision of Legal Services to Indigent Persons


citation: BPC § 6211

text:
(a) An attorney or law firm that, in the course of the practice of law, receives or disburses trust funds shall establish and maintain an IOLTA account in which the attorney or law firm shall deposit or invest all client deposits or funds that are nominal in amount or are on deposit or invested for a short period of time. All such client funds may be deposited or invested in a single unsegregated account. The interest and dividends earned on all those accounts shall be paid to the State Bar of California to be used for the purposes set forth in this article.

(b) Nothing in this article shall be construed to prohibit an attorney or law firm from establishing one or more interest bearing bank trust deposit accounts or dividend-paying trust investment accounts as may be permitted by the Supreme Court, with the interest or dividends earned on the accounts payable to clients for trust funds not deposited or invested in accordance with subdivision (a).

(c) With the approval of the Supreme Court, the State Bar may formulate and enforce rules of professional conduct pertaining to the use by attorneys or law firms of an IOLTA account for unsegregated client funds pursuant to this article.

(d) Nothing in this article shall be construed as affecting or impairing the disciplinary powers and authority of the Supreme Court or of the State Bar or as modifying the statutes and rules governing the conduct of licensees of the State Bar.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 140. (AB 3249) Effective January 1, 2019.)


citation: BPC § 6212

text:
An attorney who, or a law firm that, establishes an IOLTA account pursuant to subdivision (a) of Section 6211 shall comply with all of the following provisions:

(a) The IOLTA account shall be established and maintained with an eligible institution offering or making available an IOLTA account that meets the requirements of this article. The IOLTA account shall be established and maintained consistent with the attorney’s or law firm’s duties of professional responsibility. An eligible financial institution shall have no responsibility for selecting the deposit or investment product chosen for the IOLTA account.

(b) Except as provided in subdivision (f), the rate of interest or dividends payable on any IOLTA account shall not be less than the interest rate or dividends generally paid by the eligible institution to nonattorney customers on accounts of the same type meeting the same minimum balance and other eligibility requirements as the IOLTA account. In determining the interest rate or dividend payable on any IOLTA account, an eligible institution may consider, in addition to the balance in the IOLTA account, risk or other factors customarily considered by the eligible institution when setting the interest rate or dividends for its non-IOLTA accounts, provided that the factors do not discriminate between IOLTA customers and non-IOLTA customers and that these factors do not include the fact that the account is an IOLTA account. The eligible institution shall calculate interest and dividends in accordance with its standard practice for non-IOLTA customers. Nothing in this article shall preclude an eligible institution from paying a higher interest rate or dividend on an IOLTA account or from electing to waive any fees and service charges on an IOLTA account.

(c) Reasonable fees may be deducted from the interest or dividends remitted on an IOLTA account only at the rates and in accordance with the customary practices of the eligible institution for non-IOLTA customers. No other fees or service charges may be deducted from the interest or dividends earned on an IOLTA account. Unless and until the State Bar enacts regulations exempting from compliance with subdivision (a) of Section 6211 those accounts for which maintenance fees exceed the interest or dividends paid, an eligible institution may deduct the fees and service charges in excess of the interest or dividends paid on an IOLTA account from the aggregate interest and dividends remitted to the State Bar. Fees and service charges other than reasonable fees shall be the sole responsibility of, and may only be charged to, the attorney or law firm maintaining the IOLTA account. Fees and charges shall not be assessed against or deducted from the principal of any IOLTA account. It is the intent of the Legislature that the State Bar develop policies so that eligible institutions do not incur uncompensated administrative costs in adapting their systems to comply with the provisions of Chapter 422 of the Statutes of 2007 or in making investment products available to IOLTA members.

(d) The attorney or law firm shall report IOLTA account compliance and all other IOLTA account information required by the State Bar in the manner specified by the State Bar.

(e) The eligible institution shall be directed to do all of the following:

(1) To remit interest or dividends on the IOLTA account, less reasonable fees, to the State Bar, at least quarterly.

(2) To transmit to the State Bar with each remittance a statement showing the name of the attorney or law firm for which the remittance is sent, for each account the rate of interest applied or dividend paid, the amount and type of fees deducted, if any, and the average balance for each account for each month of the period for which the report is made.

(3) To transmit to the attorney or law firm customer at the same time a report showing the amount paid to the State Bar for that period, the rate of interest or dividend applied, the amount of fees and service charges deducted, if any, and the average daily account balance for each month of the period for which the report is made.

(f) An eligible institution has no affirmative duty to offer or make investment products available to IOLTA customers. However, if an eligible institution offers or makes investment products available to non-IOLTA customers, in order to remain an IOLTA-eligible institution, it shall make those products available to IOLTA customers or pay an interest rate on the IOLTA deposit account that is comparable to the rate of return or the dividends generally paid on that investment product for similar customers meeting the same minimum balance and other requirements applicable to the investment product. If the eligible institution elects to pay that higher interest rate, the eligible institution may subject the IOLTA deposit account to equivalent fees and charges assessable against the investment product.

history: (History: Amended by Stats. 2009, Ch. 129, Sec. 1. (AB 940) Effective January 1, 2010.)


citation: BPC § 6213

text:
As used in this article:

(a) “Qualified legal services project” means either of the following:

(1) A nonprofit project incorporated and operated exclusively in California that provides as its primary purpose and function civil legal services without charge to indigent persons and that has quality control procedures approved by the State Bar of California.

(2) A program operated exclusively in California by a nonprofit law school accredited by the State Bar of California that meets the requirements of subparagraphs (A) and (B).

(A) The program shall have operated for at least two years at a cost of at least twenty thousand dollars ($20,000) per year as an identifiable law school unit with a primary purpose and function of providing civil legal services without charge to indigent persons.

(B) The program shall have quality control procedures approved by the State Bar of California.

(b) “Qualified support center” means an incorporated nonprofit legal services center that has as its primary purpose and function the provision of legal training, legal technical assistance, or advocacy support for civil legal services without charge and which actually provides through an office in California a significant level of legal training, legal technical assistance, or advocacy support without charge to qualified legal services projects on a statewide basis in California.

(c) “Recipient” means a qualified legal services project or support center receiving financial assistance under this article.

(d) “Indigent person” means a person whose income is (1) 200 percent or less of the current poverty threshold established by the United States Office of Management and Budget or (2) who is eligible for Supplemental Security Income or free services under the Older Americans Act or Developmentally Disabled Assistance Act. With regard to a project that provides free services of attorneys in private practice without compensation, “indigent person” also means a person whose income is 75 percent or less of the maximum levels of income for lower income households as defined in Section 50079.5 of the Health and Safety Code. For the purpose of this subdivision, the income of a person who is disabled shall be determined (1) after deducting the costs of medical and other disability-related special expenses and (2) after deducting disability compensation from the United States Veterans Administration paid to a veteran with a service-related disability.

(e) “Fee generating case” means a case or matter that, if undertaken on behalf of an indigent person by an attorney in private practice, reasonably may be expected to result in payment of a fee for legal services from an award to a client, from public funds, or from the opposing party. A case shall not be considered fee generating if adequate representation is unavailable and any of the following circumstances exist:

(1) The recipient has determined that free referral is not possible because of any of the following reasons:

(A) The case has been rejected by the local lawyer referral service, or if there is no such service, by two attorneys in private practice who have experience in the subject matter of the case.

(B) Neither the referral service nor any attorney will consider the case without payment of a consultation fee.

(C) The case is of the type that attorneys in private practice in the area ordinarily do not accept, or do not accept without prepayment of a fee.

(D) Emergency circumstances compel immediate action before referral can be made, but the client is advised that, if appropriate and consistent with professional responsibility, referral will be attempted at a later time.

(2) Recovery of damages is not the principal object of the case and a request for damages is merely ancillary to an action for equitable or other nonpecuniary relief, or inclusion of a counterclaim requesting damages is necessary for effective defense or because of applicable rules governing joinder of counterclaims.

(3) A court has appointed a recipient or an employee of a recipient pursuant to a statute or a court rule or practice of equal applicability to all attorneys in the jurisdiction.

(4) The case involves the rights of a claimant under a publicly supported benefit program for which entitlement to benefit is based on need.

(f) “Legal Services Corporation” means the Legal Services Corporation established under the federal Legal Services Corporation Act of 1974 (P.L. 93-355; 42 U.S.C. Sec. 2996 et seq.).

(g) “Older Americans Act” means the federal Older Americans Act of 1965, as amended (P.L. 89-73; 42 U.S.C. Sec. 3001 et seq.).

(h) “Developmentally Disabled Assistance Act” means the federal Developmentally Disabled Assistance and Bill of Rights Act, as amended (P.L. 94-103; 42 U.S.C. Sec. 6001 et seq.).

(i) “Supplemental security income recipient” means an individual receiving or eligible to receive payments under Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) or payments under Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code.

(j) “IOLTA account” means an account or investment product established and maintained pursuant to subdivision (a) of Section 6211 that is any of the following:

(1) An interest-bearing checking account.

(2) An investment sweep product that is a daily (overnight) financial institution repurchase agreement or an open-end money market fund.

(3) An investment product authorized by California Supreme Court rule or order.

A daily financial institution repurchase agreement shall be fully collateralized by United States Government Securities or other comparably conservative debt securities, and may be established only with any eligible institution that is “well-capitalized” or “adequately capitalized” as those terms are defined by applicable federal statutes and regulations. An open-end money market fund shall be invested solely in United States Government Securities or repurchase agreements fully collateralized by United States Government Securities or other comparably conservative debt securities, shall hold itself out as a “money market fund” as that term is defined by federal statutes and regulations under the federal Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.), and, at the time of the investment, shall have total assets of at least two hundred fifty million dollars ($250,000,000).

(k) “Eligible institution” means either of the following:

(1) A bank, savings and loan, or other financial institution regulated by a federal or state agency that pays interest or dividends on the IOLTA account and carries deposit insurance from an agency of the federal government.

(2) Any other type of financial institution authorized by the California Supreme Court.

(l) “Civil legal services” includes, in addition to matters traditionally considered civil, legal services related to expungements, record sealing or clearance proceedings not requiring a finding of factual innocence, and infractions.

history: (History: Amended by Stats. 2021, Ch. 723, Sec. 12.5. (SB 211) Effective January 1, 2022.)


citation: BPC § 6214

text:
(a) Projects meeting the requirements of subdivision (a) of Section 6213 which are funded either in whole or part by the Legal Services Corporation or with Older Americans Act funds shall be presumed qualified legal services projects for the purpose of this article.

(b) Projects meeting the requirements of subdivision (a) of Section 6213 but not qualifying under the presumption specified in subdivision (a) shall qualify for funds under this article if they meet all of the following additional criteria:

(1) They receive cash funds from other sources in the amount of at least twenty thousand dollars ($20,000) per year to support free legal representation to indigent persons.

(2) They have demonstrated community support for the operation of a viable ongoing program.

(3) They provide one or both of the following special services:

(A) The coordination of the recruitment of substantial numbers of attorneys in private practice to provide free legal representation to indigent persons or to qualified legal services projects in California.

(B) The provision of legal representation, training, or technical assistance on matters concerning special client groups, including the elderly, disabled persons, juveniles, disabled veterans, and non-English-speaking groups, or on matters of specialized substantive law important to the special client groups.

history: (History: Amended by Stats. 2021, Ch. 688, Sec. 3. (SB 498) Effective January 1, 2022.)


text: A law school program that meets the definition of a “qualified legal services project” as defined in paragraph (2) of subdivision (a) of Section 6213, and that applied to the State Bar for funding under this article not later than February 17, 1984, shall be deemed eligible for all distributions of funds made under Section 6216.

history: (History: Added by Stats. 1984, Ch. 784, Sec. 2.)


citation: BPC § 6215

text:
(a) Support centers satisfying the qualifications specified in subdivision (b) of Section 6213 which were operating an office and providing services in California on December 31, 1980, shall be presumed to be qualified support centers for the purposes of this article.

(b) Support centers not qualifying under the presumption specified in subdivision (a) may qualify as a support center by meeting both of the following additional criteria:

(1) Meeting quality control standards established by the State Bar.

(2) Being deemed to be of special need by a majority of the qualified legal services projects.


citation: BPC § 6216

text:
The State Bar shall distribute all moneys received under the program established by this article for the provision of civil legal services to indigent persons. The funds first shall be distributed 18 months from the effective date of this article, or upon such a date, as shall be determined by the State Bar, that adequate funds are available to initiate the program. Thereafter, the funds shall be distributed on an annual basis. All distributions of funds shall be made in the following order and in the following manner:

(a) To pay the actual administrative costs of the program, including any costs incurred after the adoption of this article and a reasonable reserve therefor.

(b) Eighty-five percent of the funds remaining after payment of administrative costs allocated pursuant to this article shall be distributed to qualified legal services projects. Distribution shall be by a pro rata county-by-county formula based upon the number of persons whose income is 125 percent or less of the current poverty threshold per county. For the purposes of this section, the source of data identifying the number of persons per county shall be the latest available figures from the United States Department of Commerce, Bureau of the Census. Projects from more than one county may pool their funds to operate a joint, multicounty legal services project serving each of their respective counties.

(1) (A) In any county which is served by more than one qualified legal services project, the State Bar shall distribute funds for the county to those projects which apply on a pro rata basis, based upon the amount of their total budget expended in the prior year for civil legal services without charge for indigent persons in that county as compared to the total expended in the prior year for civil legal services without charge for indigent persons by all qualified legal services projects applying therefor in the county.

(B) The State Bar shall reserve 10 percent of the funds allocated to the county for distribution to programs meeting the standards of subparagraph (A) of paragraph (3) and paragraphs (1) and (2) of subdivision (b) of Section 6214 and which perform the services described in subparagraph (A) of paragraph (3) of Section 6214 as their principal means of delivering civil legal services. The State Bar shall distribute the funds for that county to those programs which apply on a pro rata basis, based upon the amount of their total budget expended for free civil legal services for indigent persons in that county as compared to the total expended for free civil legal services for indigent persons by all programs meeting the standards of subparagraph (A) of paragraph (3) and paragraphs (1) and (2) of subdivision (b) of Section 6214 in that county. The State Bar shall distribute any funds for which no program has qualified pursuant hereto, in accordance with the provisions of subparagraph (A) of paragraph (1) of this subdivision.

(2) In any county in which there is no qualified legal services projects providing services, the State Bar shall reserve for the remainder of the fiscal year for distribution the pro rata share of funds as provided for by this article. Upon application of a qualified legal services project proposing to provide legal services to the indigent of the county, the State Bar shall distribute the funds to the project. Any funds not so distributed shall be added to the funds to be distributed the following year.

(c) Fifteen percent of the funds remaining after payment of administrative costs allocated for the purposes of this article shall be distributed equally by the State Bar to qualified support centers which apply for the funds. The funds provided to support centers shall be used only for the provision of civil legal services within California. Qualified support centers that receive funds to provide services to qualified legal services projects from sources other than this article, shall submit and shall have approved by the State Bar a plan assuring that the services funded under this article are in addition to those already funded for qualified legal services projects by other sources.

history: (History: Amended by Stats. 2021, Ch. 723, Sec. 13. (SB 211) Effective January 1, 2022.)


citation: BPC § 6217

text:
With respect to the provision of legal assistance under this article, each recipient shall ensure all of the following:

(a) The maintenance of quality service and professional standards.

(b) The expenditure of funds received in accordance with the provisions of this article.

(c) The preservation of the attorney-client privilege in any case, and the protection of the integrity of the adversary process from any impairment in furnishing legal assistance to indigent persons.

(d) That no one shall interfere with any attorney funded in whole or in part by this article in carrying out his or her professional responsibility to his or her client as established by the rules of professional responsibility and this chapter.


citation: BPC § 6218

text:
All legal services projects and support centers receiving funds pursuant to this article shall adopt financial eligibility guidelines for indigent persons.

(a) Qualified legal services programs shall ensure that funds appropriated pursuant to this article shall be used solely to defray the costs of providing legal services to indigent persons or for such other purposes as set forth in this article.

(b) Funds received pursuant to this article by support centers shall only be used to provide services to qualified legal services projects as defined in subdivision (a) of Section 6213 which are used pursuant to a plan as required by subdivision (c) of Section 6216, or as permitted by Section 6219.


citation: BPC § 6219

text:
Qualified legal services projects and support centers may use funds provided under this article for the following:

(a) To provide work opportunities with pay, and where feasible, scholarships for disadvantaged law students to help defray their law school expenses.

(b) To provide loan repayment assistance in accordance with a loan repayment assistance program administered by the California Access to Justice Commission for the purposes of recruiting and retaining attorneys who perform services as described in Section 6218 and permitted by Section 6223.

history: (History: Amended by Stats. 2023, Ch. 196, Sec. 5. (SB 143) Effective September 13, 2023.)


citation: BPC § 6220

text: Attorneys in private practice who are providing legal services without charge to indigent persons shall not be disqualified from receiving the services of the qualified support centers.


citation: BPC § 6221

text: Qualified legal services projects shall make significant efforts to utilize 20 percent of the funds allocated under this article for increasing the availability of services to the elderly, the disabled, juveniles, or other indigent persons who are members of disadvantaged and underserved groups within their service area.


citation: BPC § 6222

text:
A recipient of funds allocated pursuant to this article annually shall submit a financial statement to the State Bar, including an audit of the funds by a certified public accountant or a fiscal review approved by the State Bar, a report demonstrating the programs on which they were expended, a report on the recipient’s compliance with the requirements of Section 6217, and progress in meeting the service expansion requirements of Section 6221.

The Board of Trustees of the State Bar shall include a report of receipts of funds under this article, expenditures for administrative costs, and disbursements of the funds, on a county-by-county basis, in the annual report of State Bar receipts and expenditures required pursuant to Section 6145.

history: (History: Amended by Stats. 2011, Ch. 417, Sec. 60. (SB 163) Effective January 1, 2012.)


citation: BPC § 6223

text:
No funds allocated by the State Bar pursuant to this article shall be used for any of the following purposes:

(a) The provision of legal assistance with respect to any fee generating case, except in accordance with guidelines which shall be promulgated by the State Bar.

(b) The provision of legal assistance with respect to any criminal proceeding. For purposes of this article, “criminal proceeding” does not include expungements, record sealing or clearance proceedings not requiring a finding of factual innocence, or proceedings concerning infractions.

(c) The provision of legal assistance, except to indigent persons or except to provide support services to qualified legal services projects as defined by this article.

history: (History: Amended by Stats. 2021, Ch. 723, Sec. 14. (SB 211) Effective January 1, 2022.)


citation: BPC § 6224

text:
The State Bar shall have the power to determine that an applicant for funding is not qualified to receive funding, to deny future funding, or to terminate existing funding because the recipient is not operating in compliance with the requirements or restrictions of this article.

A denial of an application for funding or for future funding or an action by the State Bar to terminate an existing grant of funds under this article shall not become final until the applicant or recipient has been afforded reasonable notice and an opportunity for a timely and fair hearing. Pending final determination of any hearing held with reference to termination of funding, financial assistance shall be continued at its existing level on a month-to-month basis. Hearings for denial shall be conducted by an impartial hearing officer whose decision shall be final. The hearing officer shall render a decision no later than 30 days after the conclusion of the hearing. Specific procedures governing the conduct of the hearings of this section shall be determined by the State Bar pursuant to Section 6225.


citation: BPC § 6225

text:
The Board of Trustees of the State Bar shall adopt the regulations and procedures necessary to implement this article and to ensure that the funds allocated herein are utilized to provide civil legal services to indigent persons, especially underserved client groups such as but not limited to the elderly, the disabled, juveniles, and non-English-speaking persons.

In adopting the regulations the Board of Trustees shall comply with the following procedures:

(a) The board shall publish a preliminary draft of the regulations and procedures, which shall be distributed, together with notice of the hearings required by subdivision (b), to commercial banking institutions, to licensees of the State Bar, and to potential recipients of funds.

(b) The board shall hold at least two public hearings, one in southern California and one in northern California where affected and interested parties shall be afforded an opportunity to present oral and written testimony regarding the proposed regulations and procedures.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 141. (AB 3249) Effective January 1, 2019.)


citation: BPC § 6226

text: The program authorized by this article shall become operative only upon the adoption of a resolution by the Board of Trustees of the State Bar stating that regulations have been adopted pursuant to Section 6225 which conform the program to all applicable tax and banking statutes, regulations, and rulings.

history: (History: Amended by Stats. 2011, Ch. 417, Sec. 62. (SB 163) Effective January 1, 2012.)


citation: BPC § 6227

text: Nothing in this article shall create an obligation or pledge of the credit of the State of California or of the State Bar of California. Claims arising by reason of acts done pursuant to this article shall be limited to the moneys generated hereunder.


citation: BPC § 6228

text: If any provision of this article or the application thereof to any group or circumstances is held invalid, such invalidity shall not affect the other provisions or applications of this article which can be given effect without the invalid provision or application, and to this end the provisions of this article are severable.


citation: BPC § 6230

text: It is the intent of the Legislature that the State Bar of California seek ways and means to identify and rehabilitate attorneys with impairment due to substance use or a mental health disorder affecting competency so that attorneys so afflicted may be treated and returned to the practice of law in a manner that will not endanger the public health and safety.

history: (History: Amended by Stats. 2019, Ch. 698, Sec. 17. (SB 176) Effective January 1, 2020.)

path: 3. PROFESSIONS AND VOCATIONS GENERALLY > 4. Attorneys > 15. Attorney Diversion and Assistance Act


citation: BPC § 6231

text:
(a) The board shall establish and administer an Attorney Diversion and Assistance Program, and shall establish a committee to oversee the operation of the program. The committee shall be comprised of 12 members who shall be appointed as follows:

(1) Six members appointed by the Board of Trustees, including the following:

(A) Two members who are licensed mental health professionals with knowledge and expertise in the identification and treatment of substance abuse and mental illness.

(B) One member who is a physician with knowledge and expertise in the identification and treatment of alcoholism and substance abuse.

(C) One member of the board of directors of a statewide nonprofit organization established for the purpose of assisting lawyers with alcohol or substance abuse problems, which has been in continuous operation for a minimum of five years.

(D) Two members who are attorneys, at least one of which is in recovery and has at least five years of continuous sobriety.

(2) Four members appointed by the Governor, including the following:

(A) Two members who are attorneys.

(B) Two members of the public.

(3) One member of the public appointed by the Speaker of the Assembly.

(4) One member of the public appointed by the Senate Committee on Rules.

(b) Committee members shall serve terms of four years, and may be reappointed as many times as desired. The board shall stagger the terms of the initial members appointed.

(c) Subject to the approval of the board, the committee may adopt reasonable rules and regulations as may be necessary or advisable for the purpose of implementing and operating the program.

history: (History: Amended by Stats. 2011, Ch. 417, Sec. 63. (SB 163) Effective January 1, 2012.)

article: 15. Attorney Diversion and Assistance Act


citation: BPC § 6232

text:
(a) The committee shall establish practices and procedures for the acceptance, denial, completion, or termination of attorneys in the Attorney Diversion and Assistance Program, and may recommend rehabilitative criteria for adoption by the board for acceptance, denial, completion of, or termination from, the program.

(b) An attorney currently under investigation by the State Bar may enter the program in the following ways:

(1) By referral of the Office of the Chief Trial Counsel.

(2) By referral of the State Bar Court following the initiation of a disciplinary proceeding.

(3) Voluntarily, and in accordance with terms and conditions agreed upon by the attorney participant with the Office of the Chief Trial Counsel or upon approval by the State Bar Court, as long as the investigation is based primarily on the self-administration of drugs or alcohol or the illegal possession, prescription, or nonviolent procurement of drugs for self-administration, or on mental illness, and does not involve actual harm to the public or the attorney’s clients. An attorney seeking entry under this paragraph may be required to execute an agreement that violations of this chapter, or other statutes that would otherwise be the basis for discipline, may nevertheless be prosecuted if the attorney is terminated from the program for failure to comply with program requirements.

(c) Neither acceptance into nor participation in the Attorney Diversion and Assistance Program shall relieve the attorney of any lawful duties and obligations otherwise required by any agreements or stipulations with the Office of the Chief Trial Counsel, court orders, or applicable statutes relating to attorney discipline.

(d) An attorney who is not the subject of a current investigation may voluntarily enter, whether by self-referral or referral by a third party, the diversion and assistance program on a confidential basis and that information shall not be disclosed pursuant to any state law, including, but not limited to, the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). Confidentiality pursuant to this subdivision shall be absolute unless waived by the attorney.

(e) By rules subject to the approval of the board and consistent with the requirements of this article, applicants who are in law school or have applied for admission to the State Bar may enter the program.

history: (History: Amended by Stats. 2021, Ch. 615, Sec. 22. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)


citation: BPC § 6233

text: An attorney entering the diversion and assistance program pursuant to subdivision (b) of Section 6232 may be enrolled as an inactive licensee of the State Bar and not be entitled to practice law, or may be required to agree to various practice restrictions, including, where appropriate, restrictions on scope of practice and monetary accounting procedures. Upon the successful completion of the program, attorney participants who were placed on inactive status by the State Bar Court as a condition of program participation and who have complied with any and all conditions of probation may receive credit for the period of inactive enrollment towards any period of actual suspension imposed by the Supreme Court, and shall be eligible for reinstatement to active status and a dismissal of the underlying allegations or a reduction in the recommended discipline. Those attorneys who participated in the program with practice restrictions shall be eligible to have those restrictions removed and to a dismissal of the underlying allegations or a reduction in the recommended discipline.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 142. (AB 3249) Effective January 1, 2019.)


citation: BPC § 6234

text:
Any information provided to or obtained by the Attorney Diversion and Assistance Program, or any subcommittee or agent thereof, shall be as follows:

(a) Confidential and shall not be disclosed pursuant to any state law, including, but not limited to, the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). This confidentiality shall be absolute unless waived by the attorney.

(b) Exempt from the provisions of Section 6086.1.

(c) Not discoverable or admissible in any civil proceeding without the written consent of the attorney to whom the information pertains.

(d) Not discoverable or admissible in any disciplinary proceeding without the written consent of the attorney to whom the information pertains.

(e) Except with respect to the provisions of subdivision (d) of Section 6232, the limitations on the disclosure and admissibility of information in this section shall not apply to information relating to an attorney’s noncooperation with, or unsuccessful completion of, the Attorney Diversion and Assistance Program, or any subcommittee or agent thereof, or to information otherwise obtained by the Office of the Chief Trial Counsel, by independent means, or from any other lawful source.

history: (History: Amended by Stats. 2021, Ch. 615, Sec. 23. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)


citation: BPC § 6235

text:
(a) (1) Except as provided in paragraph (2), participants in the Attorney Diversion and Assistance Program shall be responsible for all expenses relating to treatment and recovery.

(2) Consistent with subdivision (b), funds collected pursuant to Section 6140.9 for the Attorney Diversion and Assistance Program may be used for treatment and recovery services for participants who demonstrate an inability to pay. The State Bar shall develop rules or guidelines to implement this paragraph.

(3) In addition, the State Bar may charge a reasonable administrative fee to participants for the purpose of offsetting the costs of maintaining the program.

(b) (1) Notwithstanding paragraph (1) or (3) of subdivision (a), the State Bar shall establish a program to provide financial assistance to licensees and persons eligible for services who otherwise would be denied acceptance into the program solely due to the lack of ability to pay.

(2) The funding for financial assistance shall be drawn exclusively from the ten-dollar ($10) fee paid by each active licensee under Section 6140.9 to support the Attorney Diversion and Assistance Program.

(3) Notwithstanding the goal of providing financial assistance pursuant to paragraph (1), the amount of funding allocated for the purpose of providing financial assistance shall not be allowed to compromise the financial needs of effectively administering the Attorney Diversion and Assistance Program.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 143. (AB 3249) Effective January 1, 2019.)


citation: BPC § 6236

text: The State Bar shall actively engage in outreach activities to make licensees, the legal community, and the general public aware of the existence and availability of the Attorney Diversion and Assistance Program. Outreach shall include, but not be limited to, the development and certification of minimum continuing legal education courses relating to behavioral health issues and the prevention, detection, and treatment of substance abuse, including no-cost and low-cost programs and materials pursuant to subdivision (d) of Section 6070, informing all licensees of the State Bar of the program’s existence and benefits through both direct communication and targeted advertising, working in coordination with the judicial branch to inform the state’s judges of the program’s existence and availability as a disciplinary option, and working in cooperation with organizations that provide services and support to attorneys with issues related to behavioral health or substance abuse.

history: (History: Amended by Stats. 2022, Ch. 419, Sec. 13. (AB 2958) Effective September 18, 2022.)


citation: BPC § 6237

text: It is the intent of the Legislature that the authorization of an Attorney Diversion and Assistance Program not be construed as limiting or altering the powers of the Supreme Court of this state to disbar or discipline licensees of the State Bar.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 145. (AB 3249) Effective January 1, 2019.)


citation: BPC § 6240

text:
For purposes of this article, the following definitions apply:

(a) “Immigration reform act” means either of the following:

(1) Any pending or future act of Congress that is enacted after October 5, 2013, that authorizes an undocumented immigrant who entered the United States without inspection, who did not depart after the expiration of a nonimmigrant visa, or who stayed beyond an authorized period, to attain a lawful status under federal law or to otherwise remain in the country. The State Bar shall announce and post on its Internet Web site when an immigration reform act has been enacted.

(2) The President’s executive actions on immigration announced on November 20, 2014, or any future executive action or order that authorizes an undocumented immigrant who entered the United States without inspection, who did not depart after the expiration of a nonimmigrant visa, or who stayed beyond an approved period pursuant to a visa, to attain a lawful status under federal law or to otherwise remain in the country. The State Bar shall announce and post on its Internet Web site when an executive action or order has been issued.

(b) (1) “Immigration reform act services” means services offered in connection with an immigration reform act that are exclusively for the purpose of preparing an application and other related initial processes in order for an undocumented immigrant, who entered the United States without inspection, who did not depart after the expiration of a nonimmigrant visa, or who stayed beyond an approved period pursuant to a visa, to attain a lawful status under federal law or to otherwise remain in the country.

(2) Immigration reform act services do not include services that have an independent value apart from the preparation of an application pursuant to an immigration reform act and other related initial processes, including, but not limited to, assisting a client in preventing removal from the United States, preventing any other adverse action related to the ability to remain in the United States, including pending legal action, and achieving postconviction relief from prior criminal convictions.

history: (History: Amended by Stats. 2015, Ch. 6, Sec. 1. (AB 60) Effective June 17, 2015.)

path: 3. PROFESSIONS AND VOCATIONS GENERALLY > 4. Attorneys > 16. Attorneys Providing Immigration Reform Act Services


citation: BPC § 6241

text:
This article shall apply to the following:

(a) An attorney who is an active licensee of the State Bar who provides immigration reform act services.

(b) An attorney who is not an active licensee of the State Bar, but who meets both of the following:

(1) The attorney is authorized by federal law to practice law and to represent persons before the Board of Immigration Appeals or the United States Citizenship and Immigration Services.

(2) The attorney is providing immigration reform act services in an office or business in California.

history: (History: Amended by Stats. 2018, Ch. 659, Sec. 146. (AB 3249) Effective January 1, 2019.)

article: 16. Attorneys Providing Immigration Reform Act Services


citation: BPC § 6242

text:
(a) It is unlawful for an attorney to demand or accept the advance payment of any funds from a person for immigration reform act services in connection with any of the following:

(1) An immigration reform act as defined in paragraph (1) of subdivision (a) of Section 6240, before the enactment of that act, when the relevant form or application is released or announced and is not subject to any pending legal action, or when the acceptance date of the relevant form or application has been announced, whichever is sooner.

(2) (A) Requests for expanded Deferred Action for Childhood Arrivals (DACA) under an immigration reform act as defined in paragraph (2) of subdivision (a) of Section 6240, before the date the United States Citizenship and Immigration Services begins accepting those requests.

(B) Requests for Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) under an immigration reform act as defined in paragraph (2) of subdivision (a) of Section 6240, before the date the United States Citizenship and Immigration Services begins accepting those requests.

(C) Any relief offered under any executive action announced or executive order issued, on or after the effective date of the act adding this subparagraph, that authorizes an undocumented immigrant who either entered the United States without inspection or who did not depart after the expiration of a nonimmigrant visa to attain a lawful status under federal law, before the executive action or order has been implemented and the relief is available.

(b) Any advance payment of funds for immigration reform act services that was received after October 5, 2013, but before the enactment or implementation of the immigration reform act for which the services were sought, shall be refunded to the client promptly, but no later than 30 days after the receipt of the funds or placed into a client trust account, which must be returned or utilized under the provisions of the act amending this subdivision no later than January 20, 2017.

(c) (1) If an attorney providing immigration reform act services accepted funds for immigration reform act services prior to the effective date of this amendment to this section, and the services to be performed in connection with payment of those funds were rendered, the attorney shall promptly, but no later than 30 days after the effective date of this amendment to this section, provide the client with a statement of accounting describing the services rendered.

(2) (A) Any funds received before the effective date of this amendment to this section for which immigration reform act services were not rendered prior to the effective date of this amendment to this section shall be either refunded to the client or deposited in a client trust account.

(B) If an attorney deposits funds in a client trust account pursuant to this paragraph, he or she shall provide a written notice, in both English and the client’s native language, informing the client of the following:

(i) That there are no benefits or relief available, and that no application for such benefits or relief may be processed, until enactment or implementation of an immigration reform act and the related necessary federal regulations or forms, and that, commencing with the effective date of this amendment to this section, it is unlawful for an attorney to demand or accept the advance payment of any funds from a person for immigration reform act services before the enactment or implementation of an immigration reform act.

(ii) That he or she may report complaints to the Executive Office for Immigration Review of the United States Department of Justice, to the State Bar of California, or to the bar of the court of any state, possession, territory, or commonwealth of the United States or of the District of Columbia where the attorney is admitted to practice law. The notice shall include the toll-free telephone numbers and Internet Web sites of those entities.

history: (History: Amended by Stats. 2015, Ch. 6, Sec. 2. (AB 60) Effective June 17, 2015.)


citation: BPC § 6243

text:
(a) (1) When a contract for legal services is required in writing pursuant to Section 6148, or is subject to Section 1632 of the Civil Code, an attorney providing immigration reform act services shall provide a written notice informing the client that he or she may report complaints to the Executive Office for Immigration Review of the United States Department of Justice, to the State Bar of California, or to the bar of the court of any state, possession, territory, or commonwealth of the United States or of the District of Columbia where the attorney is admitted to practice law. The notice shall include the toll-free telephone numbers and Internet Web sites of those entities.

(2) The notice shall be in English and in one of the languages of the forms translated by the State Bar pursuant to paragraph (1) of subdivision (b), if the contract for immigration reform act services was negotiated in one of those languages.

(3) The notice shall be attached or incorporated into any written contract for immigration reform act services. If the notice is attached to a written contract, it shall be signed by both the attorney and the client.

(b) (1) The State Bar shall provide the form of the notice required in subdivision (a) and shall post the form and translations on its Internet Web site. The State Bar shall translate the form into the following languages: Spanish, Chinese, Tagalog, Vietnamese, Korean, Armenian, Persian, Japanese, Russian, Hindi, Arabic, French, Punjabi, Portuguese, Mon-Khmer, Hmong, Thai, Gujarati. The State Bar, upon request, may translate the forms into other languages.

(2) Notwithstanding paragraph (1), an attorney providing immigration reform act services who meets the criteria of subdivision (b) of Section 6241 shall be responsible for adding and translating the name of, toll-free telephone number of, and information on the Internet Web site for, the bar of the court of any state, possession, territory, or commonwealth of the United States or the District of Columbia in which he or she is admitted to practice law.

(c) Failure to comply with any provision of this section renders the contract voidable at the option of the client, and the attorney shall, upon the contract being voided, be entitled to collect a reasonable fee.

(d) This section shall become operative when the State Bar posts on its Internet Web site the form and translations required by paragraph (1) of subdivision (b). The State Bar shall post the form and translations as soon as practicable, but no later than 45 days after the effective date of this section.

history: (History: Added by Stats. 2013, Ch. 574, Sec. 2. (AB 1159) Effective October 5, 2013. Section operative on date prescribed by its own provisions.)


citation: BPC § 6250

text:
(a) “Charges” means the amount of money to be paid to the consumer legal funding company by or on behalf of the consumer, above the funded amount provided by or on behalf of the company to a California consumer pursuant to this article. Charges include all administrative, origination, underwriting, or other fees, including interest, no matter how denominated. Those charges shall not exceed 36 months from the funding date.

(b) “Consumer” means a natural person who has a pending legal claim and who resides or is domiciled in California.

(c) “Consumer legal funding” means a nonrecourse transaction in which a consumer legal funding company purchases and a consumer assigns to the company a contingent right to receive an amount of the potential proceeds of a settlement, judgment, award, or verdict obtained in the consumer’s legal claim.

(d) “Consumer legal funding company” means a person or entity that enters into a consumer legal funding contract with a consumer. A consumer legal company shall not include any of the following:

(1) An immediate family member of the consumer.

(2) A bank, lender, or other special purpose entity that is engaged in either of the following:

(A) Provides financing to a consumer legal funding company.

(B) Receives a security interest or transfer of rights from a consumer legal funding company.

(3) An attorney or accountant who provides services to a consumer.

(e) “Funded amount” means the amount of moneys provided to, or on behalf of, the consumer through a transaction meeting the definition of consumer legal funding.

(f) “Funding date” means the date on which the funded amount is transferred to the consumer by the consumer legal funding company either by personal delivery, wire, automated clearing house, or other electronic means, or mailed by insured, certified, or registered United States mail.

(g) “Immediate family member” means a parent, sibling, child by blood, adoption, or marriage, spouse, domestic partner, cohabitant, stepchild, immediate in-law, aunt, uncle, first cousin, grandparent, or grandchild.

(h) “Legal claim” means a bona fide civil claim or cause of action.

(i) “Resolution date” means the date the funded amount, plus the agreed upon charges, are delivered to the consumer legal funding company by the consumer or the consumer’s attorney.

(j) Nothing in this article shall apply to support legal services rendered to an attorney regarding the legal claim.

history: (History: Added by Stats. 2025, Ch. 565, Sec. 3. (AB 931) Effective January 1, 2026.)

path: 3. PROFESSIONS AND VOCATIONS GENERALLY > 4. Attorneys > 17. The California Consumer Legal Funding Act


citation: BPC § 6251

text:
(a) (1) All consumer legal funding transactions shall be codified in a written contract.

(2) If the consumer legal funding contract was negotiated in a language other than English, the consumer shall be provided a copy of the contract in both English and the language in which the contract was negotiated.

(b) All contracts codifying a consumer legal funding transaction shall meet the following requirements:

(1) The contract shall be drafted in plain English such that the average consumer can read and understand the terms of the contract without having to obtain the assistance of a professional.

(2) All contract terms shall be contained in the agreement when first presented to the consumer.

(3) The contract shall contain a right of rescission allowing the consumer to cancel the contract without penalty or further obligation if, within five business days after the funding date, the consumer returns all funds disbursed by the consumer legal funding company.

(4) The contract requires the consumer to initial receipt of every page of the agreement.

(5) The contract contains a statement that there shall be no fees or charges to be paid by the consumer other than what is disclosed in the contract.

(6) The contract contains a statement of the maximum amount the consumer may be obligated to pay under the contract other than in a case of material breach, fraud, or misrepresentation by or on behalf of the consumer.

(7) The contract contains a clear statement of how charges, including any applicable fees, are incurred or accrued.

(c) The contract shall contain a written acknowledgement by an attorney retained by the consumer attesting to the following:

(1) The attorney has reviewed the disclosures specified in Section 6252 with the consumer.

(2) The attorney is being compensated on a contingency basis pursuant to a written agreement.

(3) All proceeds of the legal claim will be disbursed through the attorney’s client trust account or a separate settlement fund established to receive the proceeds of the legal claim on behalf of the consumer.

(4) The attorney agrees to disburse funds from the legal claim in accordance with the contract and take any steps necessary to ensure that the terms of the litigation funding contract are fulfilled.

(5) A statement that the attorney has not received a referral fee or other consideration from the consumer legal funding company in connection with the contract and that the attorney will not receive future fees or consideration from the legal funding company.

(d) The absence of the acknowledgement required by subdivision (c) shall render the consumer legal funding transaction and associated contract null and void.

(e) Notwithstanding subdivision (d), a contract for a consumer legal funding transaction shall remain valid and enforceable in the event the consumer terminates the attorney who made the attestation required pursuant to subdivision (c).

(f) Notwithstanding any other law, a provision of the contract for a consumer legal funding transaction shall not impose a prepayment penalty on a consumer.

article: 17. The California Consumer Legal Funding Act