cases for contingent fees, and alleging numerous harmful results, including congestion in court calendars, overreaching of poor and ignorant claimants, obtaining unconscionable fees, violation of attorneys' obligations to courts and to the profession, and bringing of thousands of suits without merit, and without intending to bring them to trial, public criticism, and undermining public confidence in the administration of justice, and praying for investigation, held to disclose a condition requiring Appellate Division to entertain the petition, under Judiciary Law, § 88, subds. 2, 5, section 100, and Const. art. 6, § 2.

4. Attorney and chent 36(1)—Disciplinary power of Appellate Division may be exercised sua sponte whether misconduct charged be that of a single attorney or of particular class (Judiciary Law, § 88, subds. 2, 5). The disciplinary power of the Appellate Division over attorneys and counselors at law, under Judiciary Law, § 88, subds. 2, 5, is not merely passive, and does not need to rest inert until some third party calls it into action; but court may act sua sponte, irrespective of whether misconduct charged be that of single attorney or of a particular class. 5. Attorney and client 36(1)—Appellate Division has inherent power to order investigation into alleged systematized ambulance chasing.

Appellate Division, as a court of justice of general jurisdiction, has inherent power, irrespective of statute, to order investigation into alleged systematized ambulance chasing by a class of attorneys, causing widespread public criticism of the practices which, with their attendant evils, tend to undermine public confidence in the administration of justice, notwithstanding absence of precedent for such investigation, in view of Civil Practice Act, § 63, subd. 3, authorizing such courts to devise new process and forms of proceedings to carry out their powers and jurisdiction.

In the matter of the petition of the Association of the Bar of the City of New York and others for an inquiry by the court into certain abuses and illegal and improper practices. Motion granted.

See, also, 223 App. Div. 149, 227 N. Y. S. 666.

Argued before DOWLING, P. J., and MERRELL, MARTIN, JAMES O'MALLEY, and PROSKAUER, JJ.

Charles E. Hughes, of New York City, for the Association of the Bar of the City of New York.

Alfred R. Page, of New York City, for the New York County Lawyers' Association.

Bernard S. Deutsch, of New York City, for the Bronx County Bar Association.

DOWLING, P. J. The Association of the Bar of the City of New York, New York County Lawyers' Association, and Bronx County

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(227 N.Y.S.)

Bar Association, the three representative associations of lawyers in the First Department, have presented to this court a joint petition, wherein they set forth that there exists in this department a practice commonly known as "ambulance chasing"; that is, the solicitation by lawyers of their employment to prosecute damage cases on the basis of contingent fees, the amount of which is not fixed with reference to the nature or extent of the prospective services. Such agreements of retainer are frequently signed by injured persons, improvidently or ignorantly, when they are suffering from injuries recently received, which render them incapable of exercising a discriminating judgment.

"Ambulance chasing" is described more in detail as follows: Lawyers engaged in the practice referred to, by themselves or through their agents, who are sometimes laymen, promise or give to persons sustaining personal injuries some valuable consideration to induce them to employ such lawyers to prosecute claims for damages for their injuries. Such lawyers, through their agents, in some instances, maintain a well-organized and effective system of solicitation, by which they obtain prompt information of accidents resulting in personal injuries, from hospital employees, ambulance drivers, taxicab drivers, and others who are so situated as to have early knowledge, and they pay them compensation for such information. Solicitation for such business frequently takes place immediately after an injury has been received, often on the same day, in hospitals, in homes, and at the bedsides of injured persons, while they are in pain or otherwise distressed on account of their injuries.

In some instances the lawyer or his agent agrees to advance the costs of legal proceedings and to assume the payment of hospital expenses and medical bills as an inducement to the employment of the lawyer. The injured persons are solicited to sign printed contracts of retainer, and they frequently do so, with only vague comprehension of what the papers contain, or of their purpose and effect, and without having at the time any knowledge of the character or standing or ability of the person retained, except from a person or persons interested, frequently in a pecuniary way, in securing the retainer.

It is alleged that "ambulance chasing," pursued in the manner above described, has been systematized to such an extent that the lawyers engaged in it control a large number of the so-called personal injury actions upon the calendars of the courts in this department, and. these cases constitute a substantial proportion of the cases on the jury calendar of the Supreme Court. It is largely on account of the ac

cumulation of such cases upon the calendars of the Trial Terms of the Supreme and other courts that the present congestion in the courts exists.

It is further set forth that lawyers in this department who engage in systematic "ambulance chasing" are relatively few in number, that the practice is condemned by the great majority of the bar as disreputable, and calculated undeservedly to bring discredit upon the administration of justice and the profession at large, and that it is not consistent with honorable and ethical standards of professional conduct and in many cases is in violation of law.

The petition further recites that from the practices above described there flow other harmful results, among which are the following: Poor and ignorant claimants are overreached and oppressed by importunate lawyers, insensible to the obligations of their calling, or by solicitors acting in their behalf; claims to a great number and involving a large aggregate amount come into the control of a single lawyer, who in many cases advances filing and jury fees, views the business as a commercial transaction, and settles or litigates the claims on the basis of the pecuniary advantage to himself rather than in the best interest of the client; clients are compelled to pay unconscionable fees, wholly incommensurate with the services preformed or the results obtained; lawyers are tempted to, and sometimes do, resort to improper and illegal practices, frequently induced by reason of their financial interest in the result, and they otherwise violate their obligations to the courts and to the profession; and, finally, thousands of suits are brought without merit, and without any intention by the attorneys for the claimant to bring them to trial.

It is further averred that the evils inherent in the practice of "ambulance chasing" are by no means confined to the activities of lawyers for the claimants, but they have brought in their wake activities on the part of representatives of defendants in those cases, which are equally improper and unlawful. In many instances it is a race between solicitors for lawyers, who seek to get retainers from the unfortunate injured persons, and representatives of the prospective defendants, who seek to get releases from the same injured persons for little or nothing, as to which of these would reach the bedside first. In that way the poor unfortunates are overreached, their signatures are obtained to retainers or releases, at a time when, by reason of suffering, ignorance, or lack of time to consider, the injured person can exercise no proper judgment in the protection of his or her

(227 N.Y.S.)

rights. To the extent that members of the bar are concerned in much practices, on behalf of defendants, either by themselves, or through directing or suggesting the activities of others, their conduct is as reprehensible as that of lawyers for claimants.

The petition recites that there has been widespread public criticism of the practices referred to, and that such practices, with their attendant evils, tend to undermine public confidence in the administration of justice. The petitioners therefore pray (1) that an investigation be ordered by this court, to be conducted by itself or by such other appropriate procedure as it shall determine, in order that a judicial inquiry may be made into the practices hereinbefore alleged to exist and into any other legal and improper practices; (2) that upon the conclusion of such investigation all parties found to have been participating in any such practices be brought into court in some appropriate action or proceeding and dealt with according to law; and that such other remedy or remedies may be granted, and such judicial discipline exercised, as may be found to be effective and proper, to correct the abuses that may be found to exist.

This court is appreciative of the motives which have led the members of these associations to initiate this proceeding to clear the profession, which is dear to them, of the practices and the practitioners that have aroused the criticism which has been directed against the acts complained of, and which must inevitably weaken public confidence in it, unless steps are promptly taken to ascertain how far the criticism is justified, to end such abuses in so far as they are found to exist, and to take such remedial measures as may be found advisable to prevent the danger of their recurrence, with such disciplinary action as may be found to be required by the proof adduced.

[1] This court is agreed upon the necessity of the investigation prayed for, and it is of the opinion that it has the power to direct it, as a necessary corollary of the powers expressly conferred by statute upon this court, as well as an indispensable part of the inherent power of the Supreme Court. Subdivision 2 of section 88 of the Judiciary Law provides:

"2. The Supreme Court shall have power and control over attorneys and counselors at law, and the Appellate Division of the Supreme Court in each department is authorized to censure, suspend from practice or remove from office any attorney and counselor at law admitted to practice as such who is guilty of professional misconduct, malpractice, fraud, deceit, crime or misdemeanor, or any conduct prejudicial to the administration of justice.

That the power thus granted to the Appellate Division is not limited merely to. the trial of charges against lawyers, but extends to a preliminary investigation thereof, is made clear by the provision of subdivision 5 of the same section, as follows:

"5. The presiding justice of the Appellate Division, to which charges of professional misconduct against an attorney and counselor at law have been presented, may make an order directing the expenses of such proceedings, and the necessary costs and disbursements of the petitioner in prosecuting such charges, including also in a county wholly within a city or in a county having a population of over five hundred thousand inhabitants, the expense of a preliminary investigation in relation to such charges, to be paid by the county treasurer of a county within the judicial department, which expenses shall be a charge upon such county." Amended by Laws 1921, c. 295, § 1.

This proceeding is one primarily based on the right of the Supreme Court, under the statute, to exercise power and control over attorneys and counselors at law.

[2] The Appellate Division of the Supreme Court has and may exercise all the jurisdiction and powers that are vested in the Supreme Court. The Constitution (article 6, § 2) provides:

"The several Appellate Divisions, except as hereinafter provided, shall have and exercise such original or appellate jurisdiction as is now or may hereafter be prescribed by law. From and after the last day of December, eighteen hundred and ninety-five, the Appellate Division shall have the jurisdiction now exercised by the Supreme Court at its General Terms and by the General Terms of the Court of Common Pleas for the City and County of New York, the Superior Court of the City of New York, the Superior Court of Buffalo and the City of Brooklyn, and such additional jurisdiction as may be conferred by the Legislature."

See, also, Judiciary Law, § 100.

It is thoroughly well established that the Appellate Division, as the successor of the General Term, is not a separate court, but a branch of the Supreme Court; that in effect it is the Supreme Court sitting in banc; that it possesses all of the original jurisdiction of the Supreme Court; that while, as a matter of administrative convenience, it will ordinarily decline to take original jurisdiction, it has full power to do so, and may do so whenever it sees fit. Mitchel v. Cropsey, 177 App. Div. 663, 164 N. Y. S. 336; People ex rel. Patrick v. Frost, 133 App. Div. 179, 117 N. Y. S. 524; Campbell v. Friedlander, 51 App. Div. 191, 64 N. Y. S. 241; Barkley v. New York Cent. & H. R. R. Co., 42 App. Div. 597, 59 N. Y. S. 742, appeal dismissed 161 N. Y. 647, 57 N. E. 1103; Matter of Pye, 21 App. Div.