Current through Register Vol. 41, No. 3, September 23, 2024
A. Attorney settlement agent certification.
Each attorney settlement agent shall, at the time of initial registration and
of each subsequent reregistration, certify on the form available from the Bar
for that purpose, that the attorney settlement agent has in full force and
effect the following insurance and bond coverages, and that such coverages will
be maintained in full force and effect throughout the time the attorney
settlement agent acts, offers, or intends to act in that capacity:
1. A lawyer's professional liability
insurance policy issued by a company authorized to write such insurance in
Virginia providing first dollar coverage and limits of at least $250,000 per
claim covering the licensed attorney acting, offering, or intending to act as a
settlement agent. The policy may also cover other attorneys practicing in the
same firm or legal entity.
2. A
blanket fidelity bond or employee dishonesty insurance policy issued by a
company authorized to write such bonds or insurance in Virginia providing
limits of at least $100,000 covering all other employees of the attorney
settlement agent or the legal entity in which the attorney settlement agent
practices.
3. A surety bond issued
by a company authorized to write such bonds in Virginia, on a form approved by
the Virginia State Bar, providing limits of at least $200,000 covering the
licensed attorney acting, offering or intending to act as a settlement agent. A
copy of the approved bond form is available from the Bar. The bond may also
cover other attorney settlement agents practicing in the same firm or legal
entity. The original surety bond must be attached to the attorney settlement
agent's certification form and furnished to the Bar; a surety bond on which a
law firm is named as principal may be furnished by the firm or any one attorney
settlement agent in the firm, with other such attorney settlement agents in the
same firm attaching a copy to their forms.
The Bar reserves the right to require other evidence of the
insurance and bond coverages listed in this subsection beyond the attorney's
certification and surety bond, at its discretion.
An attorney settlement agent who has no employees other than
the attorney settlement agent or other than a licensed owner, partner,
shareholder, or member of the legal entity in which the attorney settlement
agent practices may apply to the Bar for a waiver of the coverage required in
subdivision 2 of this subsection, using the form available from the Bar. Such
waiver requests will be acted on by the Executive Committee of the Bar, whose
decision shall constitute final action by the agency.
B. Separate fiduciary trust
account. Each attorney settlement agent shall maintain one or more separate and
distinct fiduciary trust accounts used only for the purpose of handling funds
received in connection with escrow, closing, or settlement services. Funds
received in connection with real estate transactions not covered by Chapter
27.3 (§ 55-525.16 et seq.) of Title 55 of the Code of Virginia may also be
deposited in and disbursed from such accounts. All funds received by an
attorney settlement agent in connection with escrow, closing, or settlement
services shall be deposited in and disbursed from the separate fiduciary
accounts in conformity with both the Bar's disciplinary rules and Chapter 27.3.
These separate fiduciary trust accounts shall be maintained in the same manner
and subject to the same rules as those promulgated by the Bar for other lawyer
trust accounts, as well as in conformity with Chapter 27.3. One separate
fiduciary trust account may be maintained and used by all attorney settlement
agents practicing in the same firm or legal entity.
C. Settlement statements. All settlement
statements for escrow, closing, and settlement services governed by Chapter
27.3 (§ 55-525.16 et seq.) of Title 55 of the Code of Virginia and this
chapter shall be in writing and identify, by name and business address, the
settlement agent.
D. Complaints
against attorney settlement agents. The Bar shall receive complaints or
investigate alleged violations of Chapter 27.3 (§ 55-525.16 et seq.) of
Title 55 of the Code of Virginia or this chapter by attorney settlement agents.
If, after investigation, the Bar does not have reasonable cause to believe that
one or more violations of Chapter 27.3 or this chapter have occurred, the Bar
may dismiss the complaint as unfounded.
If, after investigation, the Bar has reasonable cause to
believe that one or more violations have occurred, the following procedures
shall apply:
1. The attorney
settlement agent shall be notified in writing of the alleged
violations.
2. The attorney
settlement agent shall have 30 days from the date of such notification to
respond in writing to the alleged violations. If, after receipt of the
response, the Bar no longer has reasonable cause to believe that one or more
violations of Chapter 27.3 (§ 55-525.16 et seq.) of Title 55 of the Code
of Virginia or this chapter have occurred, the Bar may dismiss the complaint as
unfounded.
3. If the Bar believes
the alleged violation presents or presented a risk to consumers protected under
Chapter 27.3 (§ 55-525.16 et seq.) of Title 55 of the Code of Virginia,
the Bar may request a hearing and issue an order requiring the attorney
settlement agent to appear at the hearing, whether or not the attorney
settlement agent has responded in writing to the notice of alleged violation or
the 30-day response time period has lapsed.
4. In conducting investigations of alleged
violations of Chapter 27.3 (§ 55-525.16 et seq.) of Title 55 of the Code
of Virginia or this chapter by attorney settlement agents, the Bar, by Bar
Counsel, shall have the authority to issue summonses or subpoenas to compel the
attendance of witnesses and the production of documents necessary and material
to any inquiry.
5. The following
shall be applicable to hearings on alleged violations of Chapter 27.3 (§
55-525.16 et seq.) of Title 55 of the Code of Virginia or this chapter:
a. Hearings shall be held before the
disciplinary board within 60 days of the issuance of the Bar's order to
appear.
b. The standard of proof of
violations of Chapter 27.3 (§ 55-525.16 et seq.) of Title 55 of the Code
of Virginia or this chapter shall be clear and convincing evidence.
c. Hearings shall be conducted in the same
manner as attorney misconduct hearings as set out in Rules of Court, Part Six,
Section IV, Paragraph 13.
d. Agreed
dispositions may be entered into in the same manner as agreed dispositions at
the disciplinary board in attorney misconduct cases.
e. The attorney settlement agent's prior
disciplinary record and prior record of violations of Chapter 27.3 (§
55-525.16 et seq.) of Title 55 of the Code of Virginia or this chapter shall be
made available to the disciplinary board during the sanction stage of a
hearing. The prior record of violations of Chapter 27.3 or this chapter may be
made available to Bar subcommittees, district committees, the disciplinary
board or a three-judge circuit court prior to the imposition of any sanction
for attorney misconduct.
f. If the
attorney settlement agent is found to have violated Chapter 27.3 (§
55-525.16 et seq.) of Title 55 of the Code of Virginia or this chapter, the
attorney settlement agent may be subject to the following penalties, at the
disciplinary board's discretion:
(1) A penalty
not exceeding $5,000 for each violation;
(2) Revocation or suspension of the attorney
settlement agent's registration; and
(3) Any other sanction available to the
disciplinary board in attorney disciplinary proceedings under the rules of the
Virginia Supreme Court, including, but not limited to, revocation or suspension
of the attorney settlement agent's license to practice law.
6. The disciplinary
board shall assess costs in accordance with the same rules and procedures that
apply to the imposition of costs in attorney misconduct cases.
7. All matters and proceedings pertaining to
alleged violations of Chapter 27.3 (§ 55-525.16 et seq.) of Title 55 of
the Code of Virginia or this chapter are public. Related attorney misconduct
cases shall be heard by the disciplinary board together with alleged violations
of Chapter 27.3 or this chapter. Any related disability issues shall be heard
by the disciplinary board separately.
8. The Clerk of the Disciplinary System of
the Bar shall maintain files and records pertaining to ended cases involving
alleged violations of Chapter 27.3 (§ 55-525.16 et seq.) of Title 55 of
the Code of Virginia or this chapter. The clerk shall follow the same file
destruction policies that are utilized in attorney misconduct cases.
9. The Bar may proceed against an attorney
settlement agent for alleged violations of Chapter 27.3 (§ 55-525.16 et
seq.) of Title 55 of the Code of Virginia or this chapter notwithstanding that
the attorney settlement agent has resigned from the practice of law,
surrendered his license to practice law in the Commonwealth of Virginia or had
his license to practice law in the Commonwealth of Virginia revoked.
10. An appeal from an order of the
disciplinary board imposing sanctions under Chapter 27.3 (§ 55-525.16 et
seq.) of Title 55 of the Code of Virginia or this chapter shall be conducted in
accordance with the provisions of Rules of Court, Part Six, Section IV,
Paragraph 13 pertaining to an appeal of an order of the disciplinary board
imposing sanctions upon findings of attorney misconduct.
NOTICE: The following forms used in administering the
regulation were filed by the agency. The forms are not being published;
however, online users of this issue of the Virginia Register of Regulations may
click on the name of a form with a hyperlink to access it. The forms are also
available from the agency contact or may be viewed at the Office of the
Registrar of Regulations, General Assembly Building, 2nd Floor, Richmond,
Virginia 23219.
Statutory Authority: § 55-525.30 of the Code of
Virginia.
