Untitled Texas Attorney General Opinion ( 1977 )

AUUSIN. -I3 78711
April 7, 1977
The Honorable Gibson Gayle, Jr. Opinion 80. H- 974
President
State Bar of Texas Re: Whether non-lawyers
-Austin,Texas 76701 may represent corporations
aa individuals at
administrativehearings
of state boaxds aud
agencies. :.
'.
Dear Mr. Gayle:
You have requestedour opinion as to whether representation
of corporationsand individualsby non-lawyers before the
Industrial Accident Board aa the State Board of Insurance
constitutes the unauthorizedpractice of law.
It is well establishedthat the purpose of laws land
decisions prohibitingthe performance of legal services by
non-lawvexs is to protect the public from unqualifiedpersons.
Hexter Title 6 Abstract Co. v~Grievance &ttee, 179
m ``(T~ac~ aevance thmaittee & De
S.W.Zd 126 (Tex.Civ. App. -- Austin 1945, uo =+I %iele
430a of the Penal Code, repealed in 1949, defined various
servkes as the practik o$,lqw and.prohibitednon-lawyers
from rhm3ering such services. Prior to its repeal, several
courts noted that the judiciary may have the final authority
to define -thepractice of law, but failed .torule od the
question and based their decisions,upon the statute. Hexter
Title 5 Abstract Co. v. Grievance Committee, aupra; Carr L
'Ee:al;l;iWF '310(Tex. Civ. App. --Ft. Worthm3,
In Carr, the court held that representation
of persons &f&e the RaEad Commission in Rule 37 proceedings
was not included within the definition contained in article
430a and thus did not constitute the practice of law. The
court noted the power of the judiciary under authoritiesin
other states bu'tdid not'apply any independent judicial
examination to the services involved. However, in Grievance
Committee v. bean, BUPrl).,an
90 S.W.ZdT3mex. Civ. App. --
w.0.m.), the court held that the definition of article 430a
was not exclusive and that the judiciary retained the power
to define the practice of law.
p. 4054 '
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Y i . -- i li’ .I ” - - I. ,.. *
The Honorable Gibson Gayle, Jr..- page 2 (R-974)
Following the repeal of article 430a in 1949, the res-
ponsibilityfor defining the practice of law rested exclusively
with the judiciary,although the Legislaturecould act in aid
thereof to protect the public. Bryant v. State, 457 S.W.2a
72 (Tex. Civ. App. -- Eastlana 1970, wrE ref'd n.r.e.1. In
Southern Traffic Bureau v. Thompson, 232 S.W.Zd 742 (Tex.
Civ. App. -- San AntonioT950, writ ref'd n-r-e.), the court
dealt with the a&ions of the Bureau in presentingand
prosecutingclaims against rail carriers. The court held
that the Bureau's activities under agreementswith shippers
which gave the Bureau discretion to settle claims and accept
settlementoffers constituted the practice of law. See also
Quarles v. State Bar of Texas, 316 S.W.Zd 797 (Tex. G.-
ApT R&~l~,~.writ). Rowever, the court held
that various investigationalprocedures did not involve the
practice of law and stated:
The rule limiting the practice of law . . ;
should not be extended beyond the
requirementsof the comaongood. Southern
haffic Bureau 5 Thompson, supra at 749.
Thus, any decision concerning the definitionof the practice
of law should be based upon an analysis of the dangers apd
benefits to the public. Of course, these factors will differ
depending upon the substance and nature of particular admin-
istrative proceedings. In some instances,federal law is
relevant. See ;.&20 C.F.R. 404.971 (1976). For these
reasons, it wou impossible to answer-ageneral question
conceru5xqthe representationof persons aud corporations
before all state agencies. Accordingly,we will address
only ~+hethe specific.agenciesmentioned in your request,
the IndustrialAccident board and the State board of Insurance.
The IndustrialAccident Board was created by the
Legislatureto admgnister the State's Workmen's Compensation
V.T.C.S. arts. 8306-8309h. In Sooth v. Texas
Em i0 ers* InsuranceAssociation, 123-2r3ZZex.
"::B&liZ court explained:
[Ilt is apparent that the Industrial
Accident Board is not a court but an
adminietrativebody, that claims filed
before.it are not pleadings, and that the
presentationor hearing of claims is not
intended to be attended or governed by
rules or formalities appropriateto
trials in court.
p. 4055
I . .
The Sonorable Gibson Gayle, Jr. page 3 m-974)
. . . . .
It is important to the successful
perfonaanceof the duties of such admin-
istrativeagency and to the attainment of
the general purpose of the Workmen's
CompensationLaw that the board be per-
mittea to entertain and promptly decide
claims submitted to it, unhampered by
unnecessaryformality zna unrestrained by
the rules of pleading and evidence that
prevail in the courts. It is often desirable
that the``injuriaemployee be able to file his
claim for compensationand submit it to ~.
the board without the assistance of'an
attorney at law. g. at326.
The court further noted that the Board was empowered to make
rules not inconsistentwith law.
Prior to 1975, article 8307, section 10(b) expressly
rewgnized that nonlawyersmight represent parties before
the IndustrialAccident Board, In the enactment of,Senate
Bill 1010 by the 64th Legislature,the language 'their-
attorneys or the duly authorized agents of the parties,' was
deleted from section 10(b). This could have been an inadvertant
omission which was beyond the scope of the conference committee's
authority, since the language was in the bill as presented
to the committee and was not a subject of disagreement
between the two houses. Senate Rule 96(a), SR4, Senate
Journal, 64th Leg., p. 4 (11475);House Rule 25, section 8,
HSR 12, Rouse Journal,Vol. 1, 64th Leg., p. 63 (11675). In
addition, the deletionwas not accomplished in accordance
with the rules pertainingto amendment of existing statutes;
that is, the phrase was not bracketed and marked through as
required by Joint Rule 22(c), SCR 17, Senate Journal, 64th
p. 979 (42575). Accordingly, in our opinion, the
%ion of this language from article 8307, section 10(b)
was not a clear indicationof an intent on the part of the
Legislature to prohibit nonlawyers from practicing before
the Board.
The IndustrialAccident Board has informed us that non-
lawyers are permitted to represent parties at prehearing
conferences and at hearings before the Board. -See Board
P- 4056
.
The Honorable Gibson Gayle, Jr. - page 4 (H-974)
Rule 5.080(b) [TexasCompensationMdnUal). They may likewise
do so before the State Board of Insurance. Rule 059.01.04.008.
(Rules of Practice and Procedure before the State Board of
Insurance and the Commissionerof Insurance,.Dec.31, 1975).
This is not to say, of course, that a non-lawyer is required
or entitled to representan individual in the same manner as
an attorney is or that he may charge a fee for such represen-
tation. This has long been the practice in this state and neither
the judiciary nor the Legislaturehas seen fit to alter it.
As previously stated, any prohibition of such representation
by non-lawyersmust result from an assessment of the public
welfare. In our view, the Legislature and the agency involved
are in the best positionto make such an assessment.
The settlementof claims by an insurance adjuster was
authorized by the Statementof Principles approved by the
State Bar in 1946. 22 Texas Bar Journal 69 (1959). Similarly,
in a meeting of members of the Unauthorized'Practiceof Law
Subcommitteeand insurancerepresentativeson November 5,
1976, a consensuswas reached that *activitiesof insurance
adjusters and persons representingclaimants at prehearing
wnfe,rencesdo not present any great problem or danger to
the . . . public at the present time" and that the appearance
of non-lawyersbefore the Industrial Accident Board and the
Insurance Commission *does not. of itself. constitute (the1
practice of law." See Carr <-Stringer, m See also
m-
Sooth v. Texas EmplGrnnsurance Association, supra,
~diEctheinformal nature of Industrial Accident Board
hekings:
In the many briefs filed with this office in this
matter, there is no referenceto any detriment to the public
resulting from representationby non-lawyers before these
agencies. In our view, such a showing should be made in
order to disturb the long standing practice of the agencies.
Accordingly, in our opinion, representationof parties
before the State Board of Insurance and the Industrial
Accident.Boarddoes not constitute the unauthorizedpractice
of law so long as such representationis permitted by the
agencies and is not prohibitedby an act or decision of the
Legislatureor the courts.
We are mindful of the case law of other jurisdictions
which would in some instancespreclude representationbefore
agencies by non-lawyers. See Annot. 2 A.L.R.3d-724. However,
the decisions are not consxent; they.vary with the terms
of the various statutesand the differing views of the
p. 4057
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The RonorableGibson Gayle, Jr. - page 5 (R-974)
public welfare on the part of the courts. See Eagle Indemnity
Co.
-- v. I.A.C. of California, 18 P.2d 341 (Calf. 1933); Denver
Bar Ass~o~v. Public Utilities Commission,(~ :9:2)467
TZlvoFFmeister v. ma, 349 s.w.za 5 . ;
Goodman -
v. Beall, 200 N.E.T7mOhio 1936).
SUMMARY
Representationof parties before the
State Board of Insurance and the Industrial
Accident Board does not constitute the
unauthorizedpractice of law so long as
such representationis permitted by the
agencies and is not prohibited by any act
or decision of the Legislature or the wurts.
Very truly yours,
Attorney General of Texas
Opinion Committee
klU1
p. 4058