Virginia has a new anti-contracting law regarding court reporting services sponsored by Senator Mark Obenshain during the 2018 General Assembly session. For the past decade, national court reporting agencies have been contracting with large corporations and insurance companies to provide nationwide court reporting services for all of their cases. These contracts then require defense attorneys covering that work to schedule all of their court reporting needs with, for example, “XYZ Reporting” out of Houston. This practice began in the automobile claims arena, then quickly moved on to all other practice areas. Not only were there issues with service and quality of work, it became quickly apparent that cost shifting was occurring.
This past fall, several plaintiffs’ attorneys contacted me asking for clarification about invoices they had received from national agencies. I began keeping a file of the complaints, letters and invoices. While we are not privy to the contractual discounts and benefits that the large corporations and insurance companies are receiving for this court reporting work, it was clear opposing counsel were consistently being charged exorbitantly high rates. These invoices would typically say “Transcript Services” with an amount and no breakdown of charge. Letters and calls were made by many attorneys requesting a breakdown of the charge which appeared on their invoice. If received, the breakdowns revealed things such as “Archival fee,” “Litigation Support Package,” to name a few…things that were never ordered and that added an additional $130-$150 in fees per deponent. When pressed, these contracting agencies would sometimes remove these charges, but the reality is much of this went unnoticed and the invoices went straight to the bookkeeper and were paid. We also became aware of occasions of transcript manipulation. Changing margins or decreasing lines per page in a transcript can significantly increase the cost to the consumer. Although we know it’s wrong, we felt helpless to stop it.
More than 29 other states had enacted some form of anti-contracting legislation to prohibit these unfair practices. Our opposition was fierce though. The “Alliance” showed up in Virginia, hired a team of lobbyists, and argued against this bill at every committee hearing at every level in the General Assembly. (The Alliance was comprised of Veritext, U.S. Legal, Esquire, and Magna Legal Services.) Our opposition’s primary argument was the bill places a restriction on competition and free trade. How is it free trade when parties are mandated to use a certain reporting agency, one party is treated unfairly and inequitably and held to terms of a contract for which they were not a party to the negotiations? In other states, as a result of this opposition, their anti-contracting laws were watered down, contained too many loopholes, and contracting continues despite the legislation. We needed Virginia’s law to be strong and have enforceable consequences.
Virginia court reporters have been concerned about these practices for years. We consider ourselves impartial participants in the judicial process, not agents of a particular party. But we were always told things such as, “This is corporate; you can’t fight it.” However, it was apparent from the feedback we were receiving from attorneys that the abuses were finallybeing noticed by you. After working with Senator Obenshain and sharing the ‘evidence’ from counsel, together we explored what language worked and didn’t work in other states and crafted what we now have as our new law. I am proud to say Virginia’s law is the strongest anti-contracting legislation on record at this time. Throughout the committee hearings, in both the Senate and House, Senator Obenshain held his ground and made compelling arguments that would not compromise the essential language of the bill, while our opposition sought to manipulate and confuse the legislators. Members of the Virginia Court Reporters Association, VCRA’s lobbyist John Stirrup, as well as Mark Dix, legal counsel for VTLA, visited, called and emailed legislators constantly. In addition, after reaching out to prominent litigators all across the Commonwealth, we had a growing list of attorneys who agreed to publicly support this bill. They, too, communicated their strong support to their legislators. We are very grateful for your support.
This bill was not just supported by plaintiffs’ lawyers. Defense attorneys from across Virginia were not happy with the situation either. Many of them reached out to me and said if they spoke out, they feared losing the work themselves. They did not appreciate insurance companies mandating them to call out-of-state national agencies for local coverage; they wanted to use the court reporter of their own choosing, court reporters they have trusted and relied on for many years. Some saw the bills being sent to their opposing counsel and agreed that they were not being treated fairly. Many offered their silent support, and that’s completely understandable. A few brave defense attorneys actually added their names to the public list of supporters circulated to legislators.
Ultimately, it was the “perfect storm.” While I believe the success of this legislation is, in large part, attributable to Senator Obenshain’s relentless efforts, there is no doubt that another part of our success is due to court reporters and attorneys working together to right this wrong.
In summary, under our new law:
- Comparable services and prices must be offered to all parties involved in a legal proceeding. Attorneys may negotiate large-case discounts with court reporters and court reporting firms, as long as the court reporter and/or firm offers the same discount to all parties in the case.
- An attorney may not be restricted from choosing any court reporter or court reporting firm for their court reporting services.
- The transcript cannot be manipulated in a way that increases the end cost of the transcript.
- Parties in interest in litigation are prohibited from having a direct contractual relationship with court reporters or court reporting firms.
- Cost shifting is prohibited. Court reporters may not give a break in price to one side while making it up on the other side.
- An attorney or party can request an itemized statement of rates/charges that have been or will be provided at any time during a proceeding.
- A court reporter or court reporting agency may not provide litigation support services, including trial preparation assistance, deposition summaries, or non-published transcript databases.
- This law applies to all Virginia court reporters, whether working on a deposition captioned in our state or out of state. All depositions that take place in Virginia will be governed by this law.
This is not over. The responsibility of enforcement now shifts to you. In many states with anti-contracting laws, contracting continues in our industry because complaints are not made. If you become aware of a violation, a motion may be filed alleging the violation with the court where the legal proceeding is pending or is scheduled to be heard. A complaint alleging a violation may also be filed by any person with knowledge of the offense in the General District Court in which the court reporting services were or are scheduled to be provided. Monetary civil penalties are specified. If found in violation, the court reporting firm or provider may be barred from providing services before such court in the future. A record of the nature and disposition of each complaint will be made to the Virginia State Bar, which will be made publicly available on their website.
Questions have been asked recently, “What do I do if I’m still told I have to call XYZ Reporting? How should I handle that without losing my client?” Our response is, “Do as you’re told, don’t lose your client; the plaintiffs’ bar is well versed in this new law and will not hesitate to bring complaints when there are violations.” The only way this law will be successful is if it is enforced routinely and consistently. Time is money, and you may feel you do not have the extra time to deal with the complaint process when this occurs. But please follow through, if not for yourselves, for your peers and ultimately your clients who have been harmed enough over the years through these unfair practices. Court reporters and their state associations across the country have been diligently watching what’s been going on in Virginia and are thrilled for our victory. Social media has blown up about this. There have been many comments such as, “Congratulations, but enforcement is always the problem.” My reply is, “We’re not worried about that; we have the strongest trial lawyers in the country who will not hesitate to put a stop to this.”
To read the new law, Virginia Code Section 17.1-1000, click here.