CONTRACTING: THE NEVER-ENDING DEBATE
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- Ronald Morris
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1 CONTRACTING: THE NEVER-ENDING DEBATE Nearly 20 years ago, court reporters and court reporting firms engaging in third-party contracts with parties-in-interest to lawsuits became an issue of national significance in the court reporting community. The debate on exclusive third-party contracting has continued within the profession, but now a much wider audience is also interested in finding a resolution to what some perceive to be an unethical business practice. The judiciary, attorneys, legislators, and public consumers of reporting services all have stood by unaware as the problem festers, and an increasing number of contracts have been entered into that may call into question the time-honored neutrality of the court reporter. In 2010 and 2011, during NCRA s yearlong profession-wide study known as Writing Our Future, the NCRA Board of Directors acknowledged that the membership had grown increasingly concerned about third-party contracting and that the association should reexamine this complicated and absolutely critical issue affecting freelance court reporters. Taking a completely fresh look at an issue where general activity on NCRA s behalf had declined considerably since the early 2000s, NCRA responded to the membership s request to direct more resources and attention to this issue, to see what could be learned and improved upon at both the national and state levels. In the spring of 2011, the NCRA Board commissioned the Task Force on Contracting (TFOC), and charged it with specific tasks. As a first step in addressing those tasks, the TFOC compiled and compared the language of the various states that have passed legislation prohibiting or restricting third-party contracting, with the goal being to draft the best possible model legislation for affiliate association leaders and court reporters nationwide. Recognizing that this language would not be an ideal fit for every state, the Model Legislation instead was designed as a guide, to be used in whole or in part, according to each state s circumstances and needs. As guaranteed by the United States Constitution, citizens have the right to lobby their state or national legislature to pass laws as needed. While NCRA must operate within the parameters identified by the Department of Justice, the Association stands ready and able to assist all state affiliates in pursuit of this constitutionally-guaranteed right. The Model Legislation can be used by those states with existing legislation that may seek to strengthen or improve that legislation, or as a starting point for those states with no legislation in place that are interested in lobbying their state legislatures to pass rules restricting third-party contracting. CONTRACTING: WHAT IT IS AND WHAT IT IS NOT It must first be noted that certain topics have been raised over the years that are completely unrelated to third-party contracting. For example, a court reporter engaging in improper relations with an attorney or potentially changing the record to favor the third-party contractor are topics often discussed as diversions to the core issues of third-party contracting. Certainly these examples carry serious ethical implications, but they truly have nothing to do with the central ethical dilemma involved with third-party contracting. Given the stakes, consumers of services provided by court reporters and the public deserve better than these fallacious arguments. They deserve the guarantee of fair and impartial treatment at the hands of the court reporting profession.
2 Third-party contracting is defined by the NCRA s TFOC as any entity that provides or arranges for court reporting services entering into an oral or written contractual agreement for more than one case with any party to an action, insurance company, third-party administrator, or other individual or entity with a financial interest in the proceeding. Ideal legislation prohibiting thirdparty contracting will also restrict offering any economic or other advantage to any party, including special credit terms and preferential pricing. Further, legislation should contain provisions that bar any entity that provides court reporting services from restricting the noticing attorney s right to select a court reporter of his or her choosing. Once a party-in-interest whether a lawyer, insurance company, or a corporation is allowed to manipulate the business transaction to their exclusive benefit and/or exerts control over the work produced by the court reporter, the reporter and/or the reporting firm s impartiality can be called into question. NETWORKING VERSUS CONTRACTING Similarly, there is some confusion between the terms "contracting" and networking" when taken in the context of court reporting. Networking and contracting by their nature imply an agreement between two parties, but there is a clear and substantial difference between the two. As previously defined, contracting in the court reporting vernacular is simply an agreement between a court reporter or reporting firm and a party to an action, an insurance company, a law firm, or a third-party administrator to provide financial or other advantages to one party to a proceeding. "Networking" in the court reporting profession is generally thought of as an agreement that a freelance court reporter or court reporting firm will provide services to another court reporting firm's client. The court reporting firm providing the service essentially becomes the referring court reporting firm's subcontractor. Terms are generally negotiated beforehand, including pricing; a referral fee or networking discount being offered, if any; transcript format; production and delivery; and the required completion of certain paperwork. Succinctly, networking is an arrangement between two service providers; third-party contracting is an agreement between a service provider and a party-in-interest. While a contracting agreement may exist between the referring reporting firm and a third party, rarely, if ever, will the subcontracting reporting firm or the reporter providing the services be informed or aware of that contract or the terms of that arrangement. Obviously, there can be abuses in the networking arrangement, but these networking arrangements occur between court reporting firms, and the firms themselves are not a party to the litigation. Blanket third-party contracts entered into by court reporting firms provide specific financial advantages to one party in a case, which can call into question the actual impartiality of the court reporter. CONSUMER PROTECTION THE HARM OF THIRD-PARTY CONTRACTING In Arizona, the law states: Certified reporting is integrally related to the prompt, effective, and impartial operation of the judicial system." Most, if not all, states echo this sentiment about the importance of the court reporter to the judicial system. In the freelance world, the court
3 reporter is generally regarded as the only neutral, unbiased person at the proceeding. The credibility of the record is established on this understood neutrality. Not just actual neutrality but the perception of neutrality is equally important to consumers of court reporting services when taking a broad look at the court reporting profession. Given the public s belief in and dependence on the court reporter s integrity and impartiality, it is all the more egregious when the consumers of court reporting services are unwittingly subjected to these exclusive contractual arrangements between a party-in-interest and the court reporter or reporting firm. Often these litigants are unaware of the contract s existence, the terms involved, the benefits that one party may be receiving, and how their interests will be affected as a result. The litigant who is not a party to the contract is nonetheless bound by an agreement entered into by their opponent in the proceeding. The one assurance the American judicial system offers all litigants is the integrity and impartiality of the officers of the court, and yet many may be unknowingly and unwittingly deprived of this at any time a contract is in effect. Most individual litigants are awed and intimidated by the entire deposition process. It is, after all, an extension of the courtroom, with the same key players and oath. The only thing missing is the judge, but litigants are aware that the transcript is prepared by the court reporter, the one neutral individual in the room. Confidence in the accuracy and privacy of the record rests on the absolute assurance of the reporter s impartiality and duty to the court to safeguard the testimony. Yet, when a court reporter works under a contract that may require the court reporter to forfeit oversight of the record to an entity not constrained by the same duties and obligations, the privacy of that individual's information may be jeopardized. Once again, the consumer may never find out that their private information has been archived somewhere outside the oversight of the court reporter. While commenting on the Kentucky Court Reporters Association s efforts to work with the state legislature to implement court reporter licensure, Charlie Cunningham, a Jefferson County Circuit Court trial judge in Louisville, Kentucky, mused on the court reporting profession and the important issue of third-party contracting. Judge Cunningham states: I tried a case in my courtroom [some time] ago which involved claims by and against a young court reporter who had been recruited to Kentucky from Tennessee by a local court reporting firm. The outcome of the trial is not necessarily important. What is significant is that I learned a lot about how the business of court reporting operates - something most lawyers, and just about all litigants, have no real insight into. Suffice it to say that opportunities for, and temptations to, cut corners or (offer) special deals are more endemic than we would like to think. Just because the vast majority of court reporters resist and refuse those temptations is no reason to ignore the reality that a small number will not. Indeed, it is precisely because most court reporters are so professional that even experienced litigators can get snookered because we assume every court reporter is similar to 'our' reporter with whom we are familiar. Wrong!
4 THE SOLUTION: PASSING LEGISLATION The practice of court reporting affects the safety and welfare of the public, and as such, is, in many states, subject to regulation in the public s best interest. As we know, court reporters and other groups of professionals may not talk about their industry s pricing in general, setting prices, or how services are charged for, as this is in strict violation of the Sherman Anti-Trust Law of 1890 and supported by over a century of case law. However, the legislative process is a constitutionally guaranteed method which may be used by concerned members of the profession or consumers of court reporting services to fully ensure the protection of the public. The legislative process is open and transparent. It allows for hearings, bill mark-ups, and multiple opportunities for court reporters and the general public to comment on proposed legislation. Ideally, affected interest groups, local associations, and consumers will come to a general consensus on the best legislation to address the issue. Once a bill has been sponsored and introduced, it is assigned to a committee for study and gathering of background information. The process provides an opportunity to educate the reporting profession and a wide range of persons who may at some time find themselves consumers of court reporting services. Once legislation is enacted, it provides a basis for identifying prohibited practices and penalties for offenders. It also provides the ultimate effect of protecting not only the public but also protecting and strengthening the court reporting profession, identifying standards that must be met in the performance of the duties by the one person who is entrusted with making and preserving the judicial record. HOW TO MOBILIZE MEMBERS TO PASS LEGISLATION Communication with the reporters in your state is an integral first step to a successful legislative effort. State associations are the natural go-to source to spearhead this endeavor. State leaders can start by polling all court reporters in their state to test the support for legislation prohibiting third-party contracting or to enhance current restrictions on contracting. It is important that members and nonmembers of state associations be informed about what the language in the proposed legislation seeks to accomplish and what will be expected of them as court reporters. Education and communication with other court reporters and strategic alliances are both absolutely critical. Court reporters must be fully informed regarding the anticipated outcome of anti-contracting legislation so that no one is surprised by the results of the legislative process. A membership-wide educational campaign on what the legislation does and does not do will help simplify and expedite this process. It is critical to identify the portions of the proposed legislation that will garner the greatest support from the majority of the reporters in your state, discuss any concerns that remain, and
5 seek compromises where possible so that you can move forward with a unified front. As we have heard directly from legislators and their staffers, when there is significant infighting within the same interest group over a single bill, the legislation is very unlikely to be passed into law. Furthermore, state leaders of court reporting associations and individual court reporters should contact the Bar and the state trial lawyers association as potential strategic alliances. Consumer protections afforded to attorneys and litigants are certainly a strong benefit of legislation prohibiting third-party contracting. These affected consumers, coupled with a state s grassroots army of court reporters properly organized, can be provided the necessary tools, like exemplar letters, s, and telephone scripts and prompted to contact their legislators. Individual reporters can use these tools as well to request their clients, judges, and neighbors to contact their legislators in support of the proposed legislation. We must anticipate opposition and be prepared to face it squarely and intelligently. There should be a handful of "experts" who can testify and answer questions from legislators. It is critical to remind legislators that this is an important matter of ethics within the legal system and that court reporters have a high duty to be impartial, just as judges do. There is no restraint of trade with the enactment of legislation that restricts contracting. Laws prohibiting third-party contracting simply will guard against the appearance of any impropriety in the court system. CONCLUSION NCRA has long promoted the time-honored role and tradition of the court reporter, and the association s rules on ethics have always included the requirement to refrain from even the appearance of impropriety or favoritism. NCRA, through the Task Force on Contracting, is working to provide educational tools and legislative assistance to affiliates seeking to pass new legislation or improve existing legislation related to third-party contracting. The TFOC stands ready to help support the efforts at the state level to pursue and pass legislation from start to finish. This article was written by the members of NCRA's Task Force on Contracting: Antonia Pulone, CSR; Lisa Migliore Black, CCR; Marianne Cammarota, FAPR, RDR, CRR; Laurel Eiler, FAPR, RDR; Mary Meyer, RPR; Lori Urmston, RMR; Karen Yates, FAPR, RPR, CRR, CBC, CCP; and Bruce Matthews, FAPR, RDR, CRR.
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