A new Georgia law allows companies to file answers to summonses for garnishment without the use of an attorney. But Georgia companies should tread carefully and weigh the benefits and risks of doing so before deciding to handle their own garnishments.
The passage of House Bill 683 comes on the heels of the Georgia Supreme Court’s September 2011 order that adopted a State Bar of Georgia Advisory Opinion declaring that the filing of an answer by non-lawyer company personnel constitutes the unauthorized practice of law.
The new law, which went into effect on February 7, 2012, explicitly states that “the execution and filing of a garnishee answer may be done by an entity’s authorized officer or employee and shall not constitute the practice of law.” But there are several reasons a company still may want to enlist the help of an attorney.
While the new law allows companies to file their own answers, it also requires that, if a traverse (a document filed by either party contending that the company’s answer is insufficient or incorrect) or claim is filed against the company’s answer, an attorney must represent the company in any further proceedings. As a practical matter, this means that unless the parties take no issue with anything in the company’s answer, the company will be required to retain an attorney anyway.
At that point, the attorney—playing catch-up in a short window of time—may be unable to undo any improper treatment of funds or incorrect representations made in the answer.
Responding to garnishments is not a rudimentary, one-size-fits-all process, especially for those involving the myriad of unique products now offered by today’s financial institutions. There are real dangers involved in deciding whether funds are subject to or exempt from garnishment, how to treat those funds during the pendency of the proceedings, and how to craft a sufficient answer.
Getting it wrong could expose the company to costs that far exceed the expense of having an attorney involved from the beginning, including liability to the plaintiff for the total amount of the garnishment or liability to the defendant for amounts that should not have been turned over.
Some observers are already questioning whether the law is unconstitutional. The Georgia Constitution guarantees individuals the right to represent themselves in legal actions, but this right does not extend to companies. The Georgia Supreme Court’s adoption of the advisory opinion from the State Bar of Georgia confirmed that the prohibition on companies representing themselves applied to garnishment actions. Since the Georgia Supreme Court—and not the state legislature—is vested by the Constitution with the exclusive authority to govern the practice of law in the state, it is anticipated that the new law will be challenged on the ground that it violates the separation of powers provided by the state’s Constitution.
Companies are now permitted to have authorized officers or employees file answers to their garnishments, but they should weigh all of the benefits and risks before doing so.