FINRA Dispute Resolution Guidelines and Frequently Asked Questions for New Jersey Cases Involving Out-of-State Attorneys

Introduction

In January 2007, the Committee on the Unauthorized Practice of Law in New Jersey (Committee) issued Opinion 43 to address an inquiry regarding whether an out-of-state attorney may appear before a panel of the American Arbitration Association in New Jersey.1 The Committee determined that an out-of-state attorney may represent a party in an arbitration proceeding conducted in New Jersey, if there has not been a complaint filed in New Jersey on the issue and if the attorney is admitted and in good standing in another jurisdiction.2 While Opinion 43 continues to permit representation by an out-of-state attorney in alternative dispute resolution forums, it changes the prerequisites for appearance by the out-of-state attorney.

According to Opinion 43, an out-of-state attorney must satisfy all of the requirements of Rule of Professional Conduct 5.5 (RPC 5.5).3 Further, Opinion 43 requires, as part of the initial filing process, that the out-of-state attorney provide proof of compliance with RPC 5.5 to the alternate dispute resolution forum, particularly proof of registration with the Clerk of the Supreme Court and payment of the required fees.

Guidelines for Attorneys Who Are Not Admitted to Practice in New Jersey

Based on the requirements set forth in Opinion 43, FINRA Dispute Resolution has developed the following guidelines for attorneys who are not admitted to practice in New Jersey (i.e., out-of-state attorneys).

Out-of-state attorneys may participate fully in an arbitration hearing on the merits held in a FINRA, New Jersey forum, provided that the out-of-state attorneys satisfy the following criteria:

 

  • Comply with all of the requirements of New Jersey RPC 5.5; and

     
  • Provide proof, in the initial pleading, of:

    (1) registration with the Clerk of the New Jersey Supreme Court; and

    (2) payment of the required fees.

 

First, the New Jersey Rules of Professional Conduct can be found on the web site of the New Jersey Judiciary at www.judiciary.state.nj.us > Supreme Court > Rules of Court > Part I Appendices > Rules of Professional Conduct.

Second, to register with the Clerk of the Supreme Court, out-of-state attorneys should complete a form, which requires the out-of-state attorneys to certify that they meet the criteria to practice in New Jersey, and to designate the New Jersey Supreme Court as the agent for service. The form can be found on the web site of the New Jersey Judiciary at www.judiciary.state.nj.us > Supreme Court > Form - Designation of Clerk as Agent for Service of Process - Multijurisdictional Practice. The form should be filed at the following address:

Clerk of the Supreme Court of New Jersey
Hughes Justice Complex
P.O. Box 970
Trenton, NJ 08625-0970

Finally, the Supreme Court of New Jersey requires a filing fee for registration of out-of-state attorneys. For more information on fees, forms, and other information, you should contact the New Jersey Supreme Court by sending an email to supremect.mailbox@judiciary.state.nj.us or by calling (609) 984-4371.

FINRA Dispute Resolution Service Requirements

Arbitration

If the out-of-state attorney represents the claimant, the claimant must file proof of compliance with RPC 5.5 along with other documents, as required under Rule 10314(a) of the Code of Arbitration Procedure (Code). The Director of Arbitration (Director) will serve promptly on the respondents the proof of compliance along with other documents, as required under Rule 10314(a).

If the out-of-state attorney represents the respondent, the respondent must file proof of compliance with RPC 5.5 along with other documents, as required under Rule 10314(b) of the Code. The respondent must serve each party and the Director with a copy of the proof of compliance as well as other documents, as required under Rule 10314(b).

Mediation

If the out-of-state attorney represents a party in mediation, the out-of-state attorney must provide proof of compliance with RPC 5.5 at the outset of a mediation.

Determination of Location of FINRA Dispute Resolution Proceedings

 

  • These Guidelines apply to FINRA Dispute Resolution arbitration and mediation proceedings taking place in New Jersey.

     
  • The location of arbitration proceedings is governed by the Uniform Submission Agreement and Code of Arbitration Procedure Rule 10315, which provide that the Director of Arbitration shall set the initial hearing location, and that the arbitrators may set the location thereafter.

 

How Guidelines Affect FINRA Dispute Resolution Administration of Arbitration Proceedings

 

  • Question: When must out-of-state attorneys enter their appearance?
    Answer: Out-of-state attorneys must enter their appearance when their client's initial pleading is filed.

     
  • Question: What happens if an out-of-state attorney fails to comply with these Guidelines?
    Answer: Out-of-state attorneys who fail to comply with RPC 5.5 are subject to possible penalties under state law, and risk being prohibited from representing their client in arbitration.

     
  • Question: Do the Guidelines apply to mediation cases?
    Answer: Yes. In Opinion 43, the Committee states that out-of-state attorneys may represent a client in mediation in New Jersey, provided that the out-of-state attorney has satisfied the requirements of RPC 5.5.

     
  • Question: My opponent's counsel is an out-of-state attorney who has not complied with the Guidelines. What can I do?
    Answer: You may address issues concerning the qualifications of a representative with the appropriate state agency or licensing authority.

     
  • Question: What happens if an out-of-state attorney files a form, but an opposing party challenges the out-of-state attorney's participation in the case before the panel?
    Answer: Arbitrators should encourage the parties to address issues concerning the qualifications of a representative with the appropriate state agency or licensing authority. Under Rules 12208(d) and 13208(d) of the Codes, issues regarding the qualifications of a person to represent a party in arbitration may be determined by an appropriate court or other regulatory agency. Rules 12208(d) and 13208(d) also state that in the absence of a court order, the arbitration proceeding shall not be stayed or otherwise delayed pending resolution of such issues..

 

1 Committee on the Unauthorized Practice of Law, Opinion 43 (Supplementing Opinion 28), January 2007 (visited March 13, 2007).
2 Id.
3 Id. at p. 3.