Rule 31 - Order of Receivership(a)Employment. Commission counsel shall employ a member of the South Carolina Bar who has been admitted under Rule 402, SCACR, as a standing receiver. The receiver shall not otherwise engage in the practice of law, except to the extent a staff attorney would be authorized to do so under Rule 506, SCACR, or as explicitly authorized by these rules. The receiver shall not serve in a judicial capacity.(b)Special Receiver. The Supreme Court may appoint a special receiver when the receiver has a conflict of interest or in other circumstances when the Court deems it appropriate. The special receiver shall have the same authority, duties and responsibilities as the receiver. Any reference in these rules to the receiver shall also include a special receiver.(c)Petition. If a lawyer has been transferred to incapacity inactive status, has disappeared or died, has been suspended or disbarred, or other sufficient reason exists and no partner, personal representative or other responsible party capable of conducting the lawyer's affairs is known to exist, disciplinary counsel shall petition the Supreme Court for an order of receivership appointing the receiver to inventory the files of the inactive, disappeared, deceased, suspended or disbarred lawyer and to take action as appropriate to protect the interests of the lawyer and the lawyer's clients. Commission counsel may petition the Supreme Court for the order of receivership in cases where there are no issues involving discipline. If the Supreme Court determines that a lawyer suffers from a physical or mental condition that adversely affects the lawyer's ability to practice law but decides that a transfer to incapacity inactive status is not warranted, it may appoint the receiver to protect clients' interests. The order of receivership shall be public.(d)Duties. The receiver shall:(1) Take custody of the lawyer's active and closed files and trust, escrow, operating and any other law office accounts. The lawyer shall cooperate with the receiver and any attorney appointed to assist the receiver and shall comply with requests to take specific action regarding the client files and accounts. The chair or vice chair may issue such orders as may be necessary to assist the receiver in obtaining custody over such files and accounts, to include orders compelling the lawyer or a third party to take specific action regarding the files and accounts. The willful failure to comply with such an order may be punished as a contempt of the Supreme Court. A party who wishes to challenge such an order must immediately seek review of the order by petition to the Supreme Court;(2) Notify each client in a pending matter, and in the discretion of the receiver, in any other matter, at the client's address shown in the file, by first class mail, of the client's right to obtain any papers, money or other property to which the client is entitled and the time and place at which the papers, money or other property may be obtained, calling attention to any urgency in obtaining the papers, money or other property;(3) Publish, in a newspaper of general circulation in the county or counties in which the lawyer resided or engaged in any substantial practice of law, once a week for three consecutive weeks, notice of the discontinuance or interruption of the lawyer's law practice. The notice shall include the name and address of the lawyer whose practice has been discontinued or interrupted; the time, date and location where clients may pick up their files; and the name, address and telephone number of the receiver. The notice shall also be mailed, by first class mail, to any errors and omissions insurer or other entity having reason to be informed of the discontinuance or interruption of the law practice;(4) Release to each client the papers, money or other property to which the client is entitled. Before releasing the property, the receiver shall obtain a receipt from the client for the property;(5) With the consent of the client, file notices, motions or pleadings on behalf of the client where jurisdictional time limits are involved and other legal counsel has not yet been obtained; and(6) Perform any other acts directed in the order of receivership.(e)Term of Order. The term of an order of receivership shall be for a period of no longer than 9 months. Upon application by the receiver, the Supreme Court may extend the term of the order as necessary.(f)Representation of Clients. Clients should be encouraged to engage other counsel as soon as possible.(g)Termination of Receivership. When the provisions of (d) above and the order of receivership have been complied with, the receiver shall apply to the Supreme Court for termination of the receivership. The application shall contain the written releases of clients to whom files and other property were returned, information regarding the efforts made to contact the lawyer's remaining clients, an inventory of the files and other property remaining in the receiver's possession, an itemized account of the expenses incurred in carrying out the order of receivership, and documentation of time spent by the receiver and the receiver's staff in carrying out the order of receivership. The Supreme Court may order the lawyer to reimburse the receiver for expenses incurred and time spent in carrying out the order of receivership. Expenses and fees for the receiver and the receiver's staff time which are approved and awarded by the Supreme Court shall be paid from funds remaining in the lawyer's accounts. If either no such funds exist or the remaining funds are insufficient, the Supreme Court may direct that payment be made from the Lawyers' Fund for Client Protection. If the receiver's expenses or fees are paid by the Lawyers' Fund for Client Protection, the Supreme Court may order the lawyer to reimburse that Fund. Upon approval of the application by the Supreme Court, all files and property remaining in the receiver's possession shall be retained by the Commission. Unless otherwise ordered by the Supreme Court, the files shall be retained by the Commission for a period of 3 years at which time they shall be destroyed in a manner which protects their confidentiality. Other client property remaining in the possession of the Commission after 3 years shall be disposed of in a manner as ordered by the Supreme Court.(h)Appointment of Attorneys to Assist the Receiver. Upon petition of the receiver, the Supreme Court may appoint members of the South Carolina Bar as needed to assist the receiver in performing duties under this rule. With the exception of reasonable and necessary expenses, such as postage, telephone bills, copies, supplies and the cost of publishing legal notice in the newspaper, an appointed attorney shall serve without compensation as a service to the legal profession. However, the Supreme Court may order that the appointed attorney be reimbursed a reasonable amount for other expenses, such as the appointed attorney's time or the time of support staff, when it determines that extraordinary time and services were necessary for the completion of the required duties or when the appointment has worked a substantial hardship on the appointed attorney's practice. The Supreme Court shall determine the reasonableness of necessary expenses and other expenses. Expenses which are approved and awarded by the Supreme Court shall be paid from funds remaining in the lawyer's accounts. If either no such funds exist or the remaining funds are insufficient, the Supreme Court may direct that payment be made from the Lawyers' Fund for Client Protection. If the appointed attorney's expenses are paid by the Lawyers' Fund for Client Protection, the Supreme Court may order the lawyer to reimburse that Fund.(i)Protection of Client Information. Neither the receiver nor an attorney appointed to assist the receiver shall be permitted to disclose any information contained in the files inventoried without the consent of the client to whom the file relates, except as necessary to carry out the order of receivership or order of appointment.(j)Order Appointing Successor Lawyer. Where a lawyer has died or become disabled from practicing law, and the lawyer has named a successor lawyer in accordance with Rule 1.19, RPC, Rule 407, SCACR, the successor lawyer may petition the receiver to request an order of succession appointing the successor lawyer to inventory the files of the disabled or deceased lawyer and to take action as appropriate to protect the interests of the lawyer and the lawyer's clients.(k)Succession Education. The receiver shall have primary responsibility for conducting educational efforts on the need to protect clients through planning for succession in practice.Last amended by Order dated September 28, 2022.