Supreme Court Holds Workers’ Comp Support Firm Practices Are Not Unauthorized Practice of Law

COLUMBUS – The Supreme Court of Ohio today rejected charges that several types of workers’ compensation support services provided to Ohio employers by employees of CompManagement Inc. constitute the unauthorized practice of law. In a 6-1 decision authored by Justice Maureen O’Connor, the Court held that work performed by the company’s non-attorney staff members falls within limitations for non-attorney practice established by the Ohio Industrial Commission.

Today’s decision addressed a complaint filed by the Cleveland Bar Association with the Court’s Board on the Unauthorized Practice of Law. The bar association alleged that Dublin-based CompManagement, Inc. (CMI) and its non-lawyer employees were engaging in the unauthorized practice of law in the course of representing employers in state workers’ compensation claim proceedings before the Ohio Industrial Commission and Bureau of Workers’ Compensation (BWC). CMI is one of several “third-party administrator” companies that provide similar workers’ compensation support services to public and private-sector employers across the state.

The board issued a report in 2004 agreeing with a number of the bar association’s charges that specific activities and work functions performed by CMI employees for clients before and during workers’ compensation claim hearings were activities that may legally be performed only by licensed attorneys. The board recommended that the Supreme Court order CMI and its employees to stop engaging in these “practice of law” activities.

On Dec. 15, 2004, the Court issued a decision noting that the Industrial Commission had recently adopted a resolution, No. R04-1-01, setting forth the commission’s understanding of what types of activities were appropriate for lawyers and non-lawyers to perform in workers’ compensation proceedings. The Court remanded the case to the unauthorized practice board with a directive to reexamine CMI’s activities in light of the Industrial Commission guidelines, and issue new findings. After conducting that review, the board issued a new report in December 2005 finding that, in four areas of its service to clients, CMI’s non-attorney employees were performing work functions that are restricted to attorneys under the Industrial Commission guidelines. The board again recommended that the Court enjoin CMI and its staff from performing the specific activities it had identified as the “practice of law.”

Writing for the majority in today’s Supreme Court decision, Justice O’Connor disagreed with the board’s conclusions that CMI employees were engaged in prohibited “practice of law” activities when they conveyed settlement offers to claimants and helped draft settlement documents, raised employer questions at claim hearings without directly examining claimants or other witnesses, orally summarized factual points assembled by a client employer during hearings, and advised employers on the potential economic costs and benefits of filing appeals or taking other legal action regarding pending claims.

Summarizing the Court’s major holdings in the case, Justice O’Connor wrote: “We hold that an allegation that an individual or entity has engaged in the unauthorized practice of law must be supported by either an admission or other evidence of the specific act or acts upon which the allegation is based. Further, a third-party administrator may make actuarial determinations regarding settlement, act as a messenger for the employer in regard to settlement, and file settlement applications without conducting the unauthorized practice of law, as these activities do not require the specialized training and skill of an attorney and are permitted by Resolution No. R04-1-01. We also hold that at a hearing before the Bureau of Workers’ Compensation or the Industrial Commission, a third-party administrator who has not asked a question of the witness has not conducted an ‘examination’ of the witness and, thus, has not engaged in the practice of law. A third-party administrator may properly communicate the employer’s areas of concern to the hearing officer, who may then ask questions of the witness. Finally, we hold that if a list of employer concerns is generated entirely by the employer, is not drafted to persuade or to advocate, and is stated as a factual concern, a third-party administrator may present those concerns to the hearing officer without violating Resolution No. R04-1-01.”

Justice O’Connor concluded that, “(a)fter a thorough review of the record and allegations, we reject the final report of the board and find no evidence that any of the respondents committed any specific act constituting the unauthorized practice of law.”

The majority opinion was joined by Chief Justice Thomas J. Moyer and Justices Evelyn Lundberg Stratton, Terrence O’Donnell and Judith Ann Lanzinger. Justice Alice Robie Resnick concurred in judgment only.

Justice Paul E. Pfeifer entered a separate opinion partially concurring and partially dissenting from the majority position. Justice Pfeifer wrote that he agreed with the majority’s holding that proof of unauthorized practice requires admissions or evidence of specific unlawful actions, and that such evidence was not contained in the board’s report. He noted, however, that he dissented from the Court’s December 2004 ruling accepting the Industrial Commission’s guidelines, because those guidelines “acceded to allowing nonattorneys to perform tasks that amount to the practice of law.” Pfeifer noted his continuing opposition to such concessions, stating that in his view, “today the majority opinion appears to allow even more latitude to nonattorneys who facilitate workers’ compensation claims.”