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For immediate release: June 15, 2006
For further information contact: Winnie Comfort or Tammy Kendig

Office of Attorney Ethics Releases Annual Report

David Johnson, director of the New Jersey Judiciary's Office of Attorney Ethics (OAE), today announced the release of the 2005 Report of the Attorney Discipline System .

The OAE investigates allegations of attorney misconduct and files formal complaints where warranted. It oversees the state's district ethics committees, the district fee arbitration committees, the random audit program and the annual attorney registration process. Its annual report contains detailed information and statistics on each of these areas. The report can be found at njcourtsonline.com.

OAE Report Highlights

Public Discipline

The report shows a slight decrease in new grievances filed, from 1,513 in 2004 to 1,474 in 2005. Formal complaints were filed in 226 cases, compared to 281 in 2004. During the year, the disciplinary system completed 1,678 matters, including investigations and formal complaints. Sixty-seven percent of the investigations met the established time goals for resolution, an increase of 5 percent over 2004.

The Supreme Court imposed final sanctions on 145 attorneys in 2005, compared to the 154 final sanctions imposed in 2004. The final sanctions included

    19 disbarments;
    11 disbarments by consent;
    45 suspensions;
    8 censures;
    34 reprimands;
    26 admonitions; and
    2 transfers to disability inactive status.

Random Audits

The random audit program ensures compliance with the Supreme Court's stringent rules regarding financial record keeping for client funds. It helps educate law firms on the proper method of fulfilling these requirements and serves as a deterrent to those attorneys who may be tempted to misuse client funds. Finally, the program detects improprieties in client fund management and makes referrals to the disciplinary office. According to the annual report, the overwhelming majority of New Jersey law firms (98.8 percent) account for clients' funds properly. During calendar year 2005, the Supreme Court sanctioned four attorneys who committed serious ethical violations in managing client funds. Two of these attorneys were disbarred by consent for knowingly misappropriating client funds, and two attorneys were reprimanded for negligently mishandling client funds.

Fee Arbitration

The New Jersey Supreme Court created the current fee arbitration system in 1978 as a way to resolve fee disputes between clients and attorneys in a timely and inexpensive manner. Only a few other states offer a mandatory, statewide, attorney fee arbitration program similar to New Jersey's.

In 2005, there were 981 fee disputes filed with the state's 17 district fee arbitration committees, compared to 1,119 fee disputes filed in 2004. The committees resolved 927 disputes involving $12,052,795 in total billings. There were 554 cases awaiting resolution at the end of the year.

Most fee dispute cases were either arbitrated by district fee committees (59 percent) or settled by the parties after fee arbitration was initiated (29 percent). The committees conducted 543 hearings involving $8,022,234 in total attorney's fees. In 37 percent of cases, they upheld the attorney's fees in full. In the remaining 63 percent of cases, the fees were reduced.

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