New California law raises stakes for lawsuit advertising

(Legal Newsline) — A new California law that aims to clamp down on unethical legal advertising may increase the volume of private lawsuits filed against attorneys, “cappers,” law firms and client-referral services, legal observers say.Senate Bill 37, which was supported by the Consumer Attorneys of California and sponsored by Sen. Tom Umberg (D-Santa Ana), authorizes civil lawsuits to be filed against parties responsible for misleading, deceptive or false legal services ads, with damages awards ranging from $5,000 to $100,000 per violation of SB 37’s provisions.
“The bill authorizes a private right of action to be filed against an attorney, law firm, ‘capper,’ referral service or other individual who violates the prohibitions on unethical attorney advertising and client solicitation,” the Legislature’s analysis of the new law states.
A capper refers to anyone who illegally or unethically solicits clients for an attorney. Cappers often perform such solicitations in return for fees.
“Recognizing that the State Bar′s Office of Chief Trial Counsel, like all government regulators, faces resource constraints, this bill enables the public to assist in policing attorney advertisements and client solicitations,” the analysis of the bill says.
The Beverly Hills Bar Association noted on its website that the bill extends potential enforcement penalties to digital advertising.
“The ‘teeth’ of SB 37 are sharp, in that anyone can file a (California) State Bar complaint predicated on the failure to provide the required disclosure,” the bar association said in its post. “More concerning are the monetary damages that are available to consumers who are misled by inadequate disclosures. …”
The Los Angeles Daily Journal recently reported that in addition to increasing the number of lawsuits filed against attorneys, the new law could allow opposing counsel to challenge trial lawyers’ ethics and qualifications in class-action lawsuits based on misconduct that occurred in their efforts to market themselves.
Those in the legal profession say the law will lead to increased scrutiny of how trial attorneys refer to their past verdicts or claims about damages awards that were never collected.
“… Many in the business community complain that these advertisements do little more than generate business for ‘litigation mills’ or law firms that file a high volume of legally suspect lawsuits seeking quick settlements from unsophisticated business owners who would rather pay a quick settlement than defend their rights in court,” the analysis of the bill states.
The Civil Justice Association of California (CJAC) did not take a stance on SB 37 as it made its way through the state Legislature, but Jaime Huff, the CJAC’s president and CEO, said the need to better ensure lawyers advertise ethically is important.
“… We support the broader principle that attorney advertising and client solicitation should be truthful, transparent and consistent with the ethical obligations of the legal profession,” Huff said in a statement emailed to the Southern California Record. “Meaningful enforcement of ethical advertising and ethical standards is important to protecting consumers and maintaining confidence in the legal profession.”
Umberg has indicated that holding unethical attorneys accountable for their actions can help restore public trust in the profession.
“Updating the advertising definitions and adding prohibitions paired with authorizing citizen lawsuits against unethical attorney advertising is a necessary step to protect consumers, supplement state regulatory efforts, deter misconduct, empower victims and foster a fair legal marketplace,” he said.

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