An investigation into $800 million of default judgments entered because of fraudulent affidavits of service has resulted in a ruling that attorneys all over the country should be paying close attention to.
The bottom line: as an attorney, you and your firm can be held responsible if a process server handling your service files a false affidavit of service.
In addition to a $59 million settlement in a class-action lawsuit and a major network of collectors being barred from continuing the practice, the process service company responsible for the fraudulent affidavits, Samserv Inc., has been required to start paying process servers the same amount for unsuccessful attempts as successful ones.
Why did the court do that and what does this mean for attorneys?
The court and advocates have stated that the unfair pay rates put pressure on the process servers to lie if the notice was actually served.
While not being charged for a non-serve sounds great, the court has recognized the problem this pay-scale encourages. If the company isn’t getting paid for a non-serve, then the process server isn’t either. The law firm which used SamServ was personally named as a defendant in the class-action lawsuit, holding them accountable for utilizing a process service company who engaged in false service.
The fraudulent affidavits involved individuals who hadn’t lived at a particular address for more than ten years, subjects who had been deceased for years and others who had been at work with viable alibis at the time of service.
Law firms and attorneys need to be careful when choosing a process server who doesn’t pay their process servers equal pay for served and non-served notices. The results of this practice in New York ignited a class-action lawsuit and a resulted in a $59 million settlement, a long list of compliance requirements for NYC process servers and overturned over 100,000 judgments.
Check out the full New York Times article that discusses the case and the impact of non-payment for a non-serve has on the quality of process service: click here.