One factor that is not often discussed in disciplinary discussions is that most California boards and bureaus are self-supporting in that the licensees' dues and payments are the source of these agencies' budgets. Thus, when it comes time for professional discipline, the licensees (except licensed M.D. physicians) are ordered to pay for "cost recovery." This means that the discipline order will require the licensee to reimburse the Board or Bureau for the costs of investigation and prosecution. This has taken on even greater importance in these times of shrinking budgets.
The cost recovery is something that licensees should take into account when deciding how aggressive to be and whether or not (and how) to cooperate from the beginning of the investigation. If you treat a disciplinary proceeding like hardball civil litigation, be prepared to pay for both your own attorneys' fees and the attorney fees and costs of the Attorney General's Office and the Board or Bureau at issue.
For example, if clients want to produce discovery in a disorganized manner thrown in a box, I remind them that they will be paying for the bills of the investigator and attorney in organizing the records and files. One advantage of "smart" cooperation is to help keep these unnecessary costs and expenses down while showing the Board and Bureau the strength of our client's position. Cooperation is also viewed as a "mitigating" factor in imposing less severe discipline.
For financially well-off licensees, cost recovery may be less of an issue. Most licensed professionals are not independently wealthy. Given that the Board's and Bureau's attorney's fees and costs for an investigation can easily run up to $30,000 well before a hearing -- this is something to take into account. A long hearing can result in significant costs and attorneys' fees.
The Boards and Bureaus allow the cost recovery to be paid over time. In addition, the amount can be negotiated. This is especially true where the investigator or deputy attorney general has changed one or more times. Just remember that there are a lot of factors to consider in creating your strategy when faced with an investigation or Accusation, and cost recovery is just one of them. The idea of cost recovery reflects the over view of the Board and Bureau and illustrates well how it is an unusual administrative system that differs from civil and criminal cases.
Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings.
