court reporter ethics

May 11, 2015 By Dawn Houghton

Risky Business: Ethics in Court Reporting

This is a guest article by Paulita E. Kundid, FAPR, RPR, CLVS, FPR. Paulita is President/CEO of Volusia Reporting Company & Videoconferencing Center in Daytona Beach, FL. This article was originally published on the Florida Court Reporters Association’s website. While the article discusses Florida specific examples, this topic is relevant in Michigan and throughout the United States.

Risky Business

Ethics are important to your bottom line. What you need to know.

Ethics in Court Reporting Everybody loves something for nothing. Marketing wizards know getting “freebies” is an effective marketing tool for business solicitation, including businesses providing services to the legal profession.

Recently, there has been an increase in the number of “incentive gifts” or “reward programs” offered to attorneys and their staff in exchange for scheduling depositions with a particular reporting company/vendor. Incentive offers are pervasive in almost every industry. Airlines, hotels and credit card companies offer them so it’s easy to see why attorneys and staff don’t understand why these practices are so detrimental to the legal profession.

There are real scenarios of Florida court reporting agencies sending attorney’s staff $1000 in exchange for shifting all depos scheduled on one company’s books to another. Big screen TVs, computers, and gas cards and gift coupons in the amounts of $25, $10 and $5 are being exchanged for each depo scheduled. Some agencies are sending the gift cards directly to the secretary’s home address to intentionally avoid the office.

Attorneys may not be aware of their staff accepting gifts from court reporters/vendors in exchange for procuring work. The legal assistant is exposing her boss to discipline by the Florida Bar. Incentive programs that offer these temptations accepted by attorney’s staff place the attorney in jeopardy of his own code of ethics and can even violate FSC Rule 4-1.8: Conflict of Interest – and Bar Advisory Opinions. The attorney is fully responsible for any actions by the legal assistant. Not disclosing receiving gifts to your client, who is ultimately the legal receiver of such gifts, may result in ethical and tax consequences for those who receive the gifts.

The Florida Court Reporters Association has addressed the issue in its Code of Professional Ethics stating its members shall: Refrain from giving, directly or indirectly, any gift, incentive, reward, or anything of value to attorneys, clients, or their representatives or agents, except for items that do not exceed $100 in the aggregate per recipient each year.

Marketing items of nominal value, such as pens, pencils, coffee mugs, cookies and other advertising paraphernalia, or modest forms of meals and entertainment, or Holiday “thank you” gifts not exceeding $100 in aggregate value are considered nominal and are permissible under the Florida Court Reporters Association’s Code of Professional Ethics.

An attorney is responsible, and therefore their legal assistant, for hiring the most competent and reasonable service providers for the client, such as subpoena servers, court reporters, investigators, and so on. They are not allowed to profit from these services. That is why attorneys cannot add commissions or service fees, etc., to service-provider invoices like court reporters. They are only allowed to be reimbursed on the actual costs and they are only allowed to tax costs on the actual costs.

There are ramifications with IRS — this is considered income to the law firm. Rewards or incentives such as cash, Visa gift cards, gas coupons, expensive gifts, the value of sporting event tickets, etc., must be reported to IRS as income and any taxes due must be paid.

Additionally, according to the Hanson Bridgett legal opinion on incentive gifts in exchange for deposition bookings, these transactions are considered income, not gifts, by the IRS. This could adversely affect your victory in a case where taxable costs are awarded.

This practice of giving out coupons to law firms prompted an Orlando attorney to take a unique position on the costs being taxed against his client. By demanding that the amount of the costs taxed against his client be reduced by the value of the coupons or gifts received by opposing attorney’s legal assistant for scheduling the deposition(s); that only the balance on the invoices could be taxed as costs and not the full amount.

The fair market value of the gifts received by staff can be deducted from your client’s award.

Insurance companies are sending out notices to court reporting firms banning gifts between the attorneys representing them and court reporters: “Gifts and Gratuities: Insurance companies ban any gift, favor, gratuity, or entertainment given by court reporting companies/vendors in order to influence a business transaction or to initiate a business relationship where one did not previously exist. Experience has shown that the relationship between insurance adjusters/examiners, attorneys, body shops and vendors must be safeguarded such that the appearance of impropriety must be avoided. Gifts of any amount are not permitted.”

Florida Bar’s Rules of Professional Responsibility outlines the 22-page “cure” should your staff accept “incentive gifts” or “reward programs” in exchange for services. Law firms should implement staff policies and enforce them. Protect your clients, your staff and yourself against Risky Business.

For more on court reporting ethics from our perspective, download this free report: “Thoughts on Court Reporter Ethics: From a Court Reporting Firm Owner”.

July 10, 2013 By Dawn Houghton

Court Reporters Ethics and Gift-Giving

Recently, there has been an increase in the number of gift-giving or reward programs offered to attorneys and their staff for scheduling depositions with a particular court reporting agency. The gifts clearly are made in order to influence the selection of court reporting agencies when scheduling depositions. There is an ongoing debate among court reporters whether this practice is ethical and whether it begins to erode the industries’ reputation for operating with high integrity.

Taking a look at the question from the vantage point of a law firm and its staff, receiving these gifts and rebates presents several ethical questions. Let’s say a client brings a large case to your office. Your assistant is offered gifts, such as $25 gas cards, a $250 shopping spree, maybe even an iPad if your office books the depositions with a particular court reporting firm.

Who does the gift belong to?
Should your client be entitled to a reduction in fees to reflect the cost of the gift, or entitled to the gift itself?
How do you know that your client is not overpaying for the reporting fees that cover this marketing practice?
How do you know if your firm is overpaying for transcripts to cover the cost of these reporting rewards programs?

What does the ABA think is ethical?

Someone pays for those enticing gifts, kickbacks and rebates. And the consumer, including the lawyer, is unprotected from the loss without even knowing it. The American Bar Association, in its published Opinion 278, states that a lawyer should not accept a gratuity from anyone without the client’s consent and that the gratuity belongs to the client.

What does NCRA think is ethical?

The National Court Reporters Association has come out with an opinion on the ethics of such activities from the viewpoint of the court reporter in its “Ethics First” campaign. In 1993, NCRA adopted as part of its Code of Professional Ethics a policy that prohibits giving excessive gifts to attorneys, clients, witnesses, insurance companies, or other persons or entities associated with the litigation. The original policy set a limit of up to $25 in value per occurrence and $50 in aggregate per person per year. The limit later was set at $100 per recipient per year.

The policy was established because the NCRA Board of Directors believed that the practice of providing gifts, rewards, or incentives to attorneys, clients or their representatives or agents undermines and dilutes the integrity of the reporting profession and the status of the reporter as a neutral and impartial officer of the court. Giving excessive gifts and incentives can create, in the eye of the public, the appearance of partiality or favoritism on the part of the reporter towards the recipient.

The Board of Directors in 2008 asked the Committee on Professional Ethics to review the policy. As a result of that process, the association’s policy on gift giving was reaffirmed, and COPE Advisory Opinion No. 45 was issued to clarify the policy. In 2011, at COPE’s recommendation, the policy on gift giving has been revised to prohibit all gifts, regardless of their value, given as an incentive for future work.

What Constitutes a Gift?

To further define its position, NCRA recognizes that gifts of nominal value, such as pens, pencils, coffee mugs and other advertising paraphernalia or modest forms of meals and entertainment do not compromise the reporter or firm’s appearance of impartiality and are permissible. However, NCRA has now chosen to distinguish gifts that are for marketing purposes or to thank clients for past work versus gifts that are given in exchange for future work.

The amount of a gift is measured by its retail or fair market value, that is, what the recipient would reasonably expect to pay if they were to purchase the gift for themselves from generally accessible sources. The actual cost incurred by the firm or individual providing the gift is irrelevant.

What can be done about it?

NCRA also provides a complaint process for allegations of violations. The NCRA Committee on Professional Ethics may issue a written decision. It may issue a cautionary letter, warning or statement of advice, require remedial ethics training, order that the member be reprimanded, or determine that the member be suspended or expelled from the Association, depending upon the severity of the violation, prior history and other relevant circumstances. If a Member resigns from NCRA while a complaint is pending, COPE will still complete its determination of the matter.

The next time your firm or staff are offered an incentive in return for your repeat scheduling of depositions, stop and evaluate the practice. Is the value of the item too high? Would it need to be declared as income on your taxes? Should the gift be forwarded to your client, or simply refused by your firm? For attorneys and law firms, it would be a good idea to formulate a policy on such practices before they arise.

Most reporters understand their role in the legal system requires neutrality and impartiality. Offering incentives with high dollar values could begin to chip away at that reputation of ethical behavior that court reporters earn through fair practices. At O’Brien and Bails, we do not offer incentive gifts to capture more business.

For more on court reporting ethics from our perspective, download this free report: “Thoughts on Court Reporter Ethics: From a Court Reporting Firm Owner”.

June 13, 2013 By Dawn Houghton

Does Contracting Compromise the Impartiality of a Court Reporter?

Within the last 20 years, a controversial practice has cropped up in the court reporting profession. Some court reporters have begun contracting exclusively with companies and organizations for large amounts of services. Many court reporters are against such contracting for ethical reasons.

The trend is found with consumers in need of large volumes of court reporting services, such as insurance companies, hospitals, and large corporations. These entities sometimes contract with specific court reporters directly.

Traditionally, court reporters are hired by attorneys representing clients involved in a lawsuit. With contracting, the practice has been that these large corporations and organizations are contracting directly with court reporting firms. The reporting firm who holds the contract will then deliver all the court reporting services needed by the company or organization.

This practice raises ethical questions that are frequently debated in the court reporting industry. Concerns involve the influence a contract-holder may have over the unbiased officer of the court, the court reporter. While this type of bulk buying of services is common in other industries, for court reporters, it may affect, or have the appearance of affecting, the specific duties and requirements of an officer of the court.

Court Reporter Impartiality

MCL 600.1491(1)(a) provides that a court reporter may not “enter into or arrange for any financial relationship that compromises the impartiality of court reporters… or that may result in the appearance that the impartiality of a court reporter…has been compromised.”

One of the highest responsibilities court reporters hold, as officers of the court, is to maintain impartiality.

An officer of the court is a person employed in specific positions in the legal system. Many people think only judges and attorneys are officers of the court. However, there are many other types of individuals who can be considered officers of the court, such as translators, investigators, bailiffs, court clerks and court reporters.

As an officer of the court, a court reporter makes an official record in the presence of a judge, or outside of a judge’s presence. Officers of the court have a duty to be impartial parties. Court reporters are charged with the responsibility of creating an unbiased, true and accurate record of proceedings.

With the practice of offering contracts to insurance companies and companies needing large amounts of services, that impartiality comes into question. Can a court reporter who is engaged in a special-rates contract with one party be considered as impartial? Contracting runs the risk of placing a court reporter in some potentially difficult positions.

For instance, if an attorney feels a portion of the record has not been transcribed accurately and requests changes be made to the transcript, traditionally a court reporter would check the transcript, compare it to the steno notes, and make a determination if an error has been made. If the reporter feels no error has been made, the reporter stands by the transcript as the official record.

With court reporters who contract large amounts of services to one company or organization, this situation may put the court reporter in an extremely difficult position. The court reporter may feel a certain level of obligation to the contracting attorney to make changes to the record. The reporter might fear jeopardizing the contract, which is likely worth thousands, if not hundreds of thousands, of dollars to his or her court reporting firm. Might there be undue pressure placed on the court reporter in this type of circumstance that places bias on the court reporter? Is even just the appearance of undue influence a problem for the court reporting industry?

The debate continues over this controversial issue in the court reporting industry. O’Brien and Bails does not participate in contracting for bulk services specifically because of these ethical concerns.

If this article interests you, you might also be interested in “9 Ethics Guidelines For Court Reporting Firm Owners“.

For a more comprehensive view on court reporting ethics from our perspective, download this free report: “Thoughts on Court Reporter Ethics: From a Court Reporting Firm Owner”.

May 24, 2013 By Dawn Houghton

9 Ethics Guidelines for Court Reporting Firm Owners

It has been said that it is easier to know how to do the right thing if you have a code of ethics to follow. In court reporting, there is a code of ethics for court reporters but not necessarily a written code for court reporting firm owners. Owners of court reporting firms have an entirely different set of ethical situations that are likely to arise. We’ve thought of nine ethical codes that could be applied by court reporting firm owners.

Ethics of Court Reporting Firm Owners

A court reporting firm and its owners shall:

Protect the record. Court reporters are officers of the court. Court reporters and firm owners must ensure that the firm and the firm’s court reporters are independent, impartial keepers of the record.
Disallow any appearance of impropriety. Disclose any contracts with any party to the case on the record at each deposition, including special rates charged to the party to the contract. This is required in the State of Michigan pursuant to MCL 600.1490-1493.
Charge each party in the litigation fairly and according to the laws of the state for transcripts and other court reporting fees.Reporters in the State of Michigan must follow the 2/3rds rule for transcripts as set out in MCL 600.1491 (2)(b), i.e., you cannot be charged more than 2/3rds the cost of the original for a copy.
Do not sell the reporter’s transcript, unbeknownst to the reporter, for the financial benefit of the firm owner at the expense of the court reporter. As keeper of the record, the reporter is an officer of the court and should be fairly compensated.
Require a court reporter to transcribe back-ordered transcripts.Only proceed with transcribing the reporter’s notes if the reporter is unavailable due to death, disability, or if the reporter cannot be reached after due diligence. If the firm has to have another reporter transcribe the proceedings, indicate on the certificate page who the transcribing reporter is to sustain the integrity of the record. Never indicate the original reporter transcribed the deposition if they have not done so.
Regularly reinforce the practice of ethical behavior with reporters and provide ethics training. It is important for a firm’s reporters to know their firm owner is 100% behind the ethical behavior of their firm.
Avoid the appearance of impropriety by excessive gift giving. Gift giving should not exceed $25 per incidence and $100 aggregate for the year for each client per IRS guidelines, and some clients’ firms discourage gift giving of any kind. Court reporting firms should be cognizant of the risk they put their clients in when they exceed this ethical amount. Gifts should never be given on a quid pro quo for work given. Repeat customer incentive programs are examples of “pay for work given” and should not be offered.
Educate clients regarding the consequences of excessive gift giving and the potential tax implications to their client of such gift giving. The gift may be considered as property of the attorney’s client, not property of the attorney or staff. There may also be tax implications to an attorney’s firm if an attorney and/or legal assistant for the firm is accepting gifts and not reporting such on their tax returns.
Refuse to assist in deposition or trial strategy for either party to a lawsuit while simultaneously providing the court reporting services for the case. There should be a complete separation of the trial technology business and the court reporting services business so there is no appearance of the court reporting firm appearing to be working for one side to the detriment of the other in a case.

For more on court reporting ethics from our perspective, download this free report: “Thoughts on Court Reporter Ethics: From a Court Reporting Firm Owner”.

May 22, 2013 By Dawn Houghton

Court Reporter Ethics and Judgment Calls: What Should You Do?

Over the course of your court reporting career, there will be times when you will be faced with situations that require you to make a judgment call. When choosing the right action to take, it helps to be familiar with a code of ethics. By reviewing a code of ethics, you will be able to more easily make the right decision. Here are a few situations you may face sometime in your career. Many of these types of situations are addressed in the National Court Reporters Association Code of Ethics.

Can You Deliver?

You are a new court reporter and are assigned to a deposition. When you get to the deposition, the attorneys inform you the witness is a doctor and the case is a medical malpractice case. You have never taken a malpractice deposition and are worried it might be above your skill level. What should you do?

Solution: When you are in a situation where you feel your skill level does not match the assignment, you should call your court reporting firm and explain the situation. A good court reporting firm will find a court reporter who is able to successfully complete the deposition. First and foremost, it is your responsibility to ensure the testimony is recorded accurately and that the record is protected.

Too Sick to Work

You wake up feeling very sick and unable to leave your home. You have a deposition scheduled at 10:00 a.m. and know you can’t make it. What should you do?

Solution: If you work for a court reporting firm, call your firm and ask that another court reporter be assigned. Most court reporting firms will have someone always available to take such emergency calls and schedule another reporter to take the deposition.

Independent reporters may not have the luxury of this type of backup. In that case, you should find another court reporter who is available and can take the deposition for you. If the deposition is of a technical nature, be sure to schedule a reporter that you know has the skill to complete the assignment. Your highest responsibility is to always ensure that the deposition testimony is being recorded accurately by a qualified court reporter.

When to Let Go

Once you transcribe a deposition, you keep the steno notes and a copy of the transcript for your records in case there is ever a back order. But you work from a small home office, and your closet is running out of room. You would like to free up some space by getting rid of some of those old notes and transcripts. What should you do?

Solution: Many states have different retention policies for shorthand notes. Various state and federal courts will also have retention policies. It is good to become familiar with these various retention policies for jurisdiction in which you do business.

The National Court Reporters Association’s Code of Professional Ethics states:

“Preserve the shorthand notes in accordance with statute or court order, or otherwise for a period of no less than five (5) years through storage of the original paper notes or an electronic copy of either the shorthand notes or the English transcript of the notes on computer disks, cassettes, backup tape systems, or optical or laser disk systems.”

Many good reporting firms are also able to provide storage capabilities. It is a good idea to have backups in several locations so in case of a hardware failure, you will be able to access your notes and dictionary.

Timely Service

You have had an unusually busy month, taking depositions every day. A few transcripts are due in 10 days. The rest of the transcripts have no specific due date. You usually have all transcripts finished within 10 business days, but there are so many transcripts right now that there is no way you will be able to finish all of them in 10 business days. What should you do?

Solution: Even though you haven’t been given a specific date by which the attorney will need the transcript, you should plan on delivering all transcripts to clients no later than two weeks. If you have enough backlog that you will start missing this reasonable time, you should ask your firm to stop scheduling you until you can catch up. If you are an independent court reporter, you should begin to call your network of court reporters and make arrangements for another reporter to take future depositions until you can catch up on transcription.

Stay Relevant

You have been building a very successful career in court reporting for several years now. You know there is new technology and new writing techniques out there but you haven’t had time to dig into any of these new areas. What should you do?

Solution: To stay relevant in the field of court reporting, you need to continually learn new things and improve your skills. You should stay up-to-date on new technologies. if you do not, you are in serious danger of becoming a dinosaur. Technology changes quickly, and you will be outdated faster than you think. It is a good habit to continue to add to your body of knowledge on all areas of court reporting, such as punctuation and grammar skills, the business of court reporting, new realtime and shorthand techniques and technology.

Michigan’s state association, Michigan Association of Professional Court Reporters, is a great source for reporters to gain knowledge in the court reporting industry, and they regularly put on seminars related directly to court reporters’ software, which is a very cost-effective way to learn about the updates in your software programs, allowing you to become more efficient in producing your transcripts.

Involvement Required

You have been reporting for a few years now and are very busy. You know there are court reporting associations at state and national levels. You find most of the reporters you know are in one or more associations or court reporting groups. You just don’t know if they are usefull to you personally. What should you do?

Solution: It’s time to join organizations and attend some events and meetings. You will find many resources that will be of direct benefit to you. Professional organizations are a place where the future of an industry and integrity of an industry is discussed. Activities and initiatives are often in existence that protect the profession and further advance the industry in many ways. These are all of benefit to you as a court reporter working in the industry.

Everyday Ethics

Your ethics govern your thought process so that when a problem arises or you need to try and work your way through a situation, your solution is based on your ethics. Having a standard of ethics that governs us each day of our lives means we always know how we are to act no matter what. It is important as court reporters to remind ourselves of what it is we stand for.

For more on court reporting ethics from our perspective, download this free report: “Thoughts on Court Reporter Ethics: From a Court Reporting Firm Owner”.