Parallel proceedings, conflicting rules: Managing civil and criminal exposure

When a civil case and a criminal case arise from the same act, omission or set of circumstances, they are referred to as "parallel proceedings." The two types of cases have distinct natures.

First, criminal cases are brought and prosecuted by the state or federal government. In California, criminal actions are brought in the name of the "People of the State of California." In civil cases, the action is prosecuted by the aggrieved party (the plaintiff) against the alleged wrongdoer (the defendant).

Standards of proof

The two types of cases have different standards of proof. A criminal defendant is guilty only when he pleads guilty to the charge(s) or is found guilty beyond a reasonable doubt after a jury or court trial.

A civil defendant, on the other hand, is liable only if he pleads guilty or is found guilty by a preponderance of the evidence -- meaning that he is more likely than not (greater than 50%, however slight) guilty. Guilty pleas to, or convictions of, a felony are admissible in civil cases as res judicata or collateral estoppel. Guilty pleas to, or convictions of, a misdemeanor are not admissible in a civil proceeding. A plea of nolo contendere (no contest) to a felony charge is admissible in civil court, but not if the plea is to a misdemeanor.

Philosophy of the cases

The two types of cases are designed to accomplish separate philosophies. The criminal justice system's philosophy is based on punishment and very rarely rehabilitation. Punishment of convicts can include fines, probation, community service, jail or prison, restitution, and in some states, death.

Unlike criminal justice, the philosophy of the civil justice system is not primarily concerned with punishment of the wrongdoer. Rather, the focus is on restoring the injured plaintiff to the position he would have been in had it not been for the defendant's negligence or other tortious conduct. In short, the goal is to make the injured person "whole."

Stay of civil case

When a party faces criminal exposure related to conduct at issue in civil litigation, that party may request a stay of the civil litigation until the criminal matter is resolved. However, stays are not guaranteed. And it must be kept in mind that criminal proceedings do not toll the statute of limitations for a civil case arising out of the same conduct.

Without a stay, the defendant in a civil case faces a Hobson's Choice:  either invoke his Fifth Amendment privilege during discovery, which could result in an adverse inference in the civil case (Baxter v. Palmigiano (1976) 425 U.S. 308, 318), or waive his Fifth Amendment privilege, which could impair his defense of the criminal case.

The Constitution does not ordinarily require a stay of civil proceedings pending the outcome of criminal proceedings. In the absence of substantial prejudice to the rights of the parties involved, simultaneous parallel civil and criminal proceedings are unobjectionable under our jurisprudence. Nevertheless, a court may decide in its discretion to stay civil proceedings when the interests of justice seem to require such action. (United States v. Kerdel (1970) 397 U.S. 1, 12 n. 27.)

The decision whether to stay civil proceedings in the face of a parallel criminal proceeding should be made in light of the particular circumstances and competing interests involved in the cases. This means that the decisionmaker should consider the extent to which the defendant's Fifth Amendment rights are implicated. (Keating v. Office of Thrift Supervision (9^th Cir. 1995) 45 F.3d 323, 324.)

The courts consider five factors when determining whether a stay should be granted:

• The plaintiff's interest in moving forward with the civil litigation and the potential prejudice to the plaintiff caused by the delay;

• The burden on the defendant caused by the proceedings;

• Judicial efficiency;

• The interests of persons not party to the civil litigation; and

• The public interest in the pending civil and criminal litigation. (Keating, supra.)

Discovery rules

Differences in discovery rules and practices between the two types of cases are significant. Discovery in civil cases is relatively wide open; the parties can generally request disclosure of anything that is relevant to the case and not privileged.

Discovery in criminal cases is considerably more limited and often more one-sided than in civil cases. The prosecution is generally obligated to turn over evidence to the defense.

Without a doubt, the greatest difference in discovery rules between the two types of cases is that the criminal prosecutor has a constitutional duty to disclose to the defense exculpatory evidence that may free the defendant or reduce his punishment in a criminal case. (Brady v. Maryland (1963) 373 U.S. 83 ("[T]he suppression by the prosecution of evidence favorable to the accused upon request violates due process where the evidence is material either to guilt or punishment, irrespective of the good faith or bad faith of the prosecution.")

No such rule applies to civil litigation, where each party may go to great lengths to conceal any and all evidence that may be detrimental to their case and useful to their opponent.

It is in the civil plaintiff's attorney's best interest to form a cordial working relationship with the criminal prosecuting attorney and share evidence. After all, a guilty plea by, or conviction of, the criminal defendant will be to his client's benefit.

Right against self-incrimination

The Fifth Amendment protects the right of a person from being compelled in any criminal case to be a witness against himself.

In a civil case, when a defendant refuses to answer a question on the basis of his constitutional right to be free from self-incrimination, the trier of fact - judge or jury - can draw an adverse inference and assume that the defendant's answers to the unanswered questions would have been unfavorable to him. The defendant must either keep silent in the hope of being acquitted in the criminal case but potentially losing the civil case, or answer the questions and risk being convicted but potentially prevailing in the civil case.

In a criminal case, the prosecutor cannot comment on a defendant's decision not to testify, and the jury is instructed not to draw any negative conclusions from it.

On the other hand, in a civil case, the trier of fact can consider the defendant's silence as an indication that the information the defendant withheld would have supported the plaintiff's case.

Restitution of economic damages

As part of the Crime Victims Bill of Rights, the California Constitution requires courts to order crime victims restitution whenever the victim has suffered economic losses. The primary purpose of victim restitution is to fully reimburse the victim for his or her total economic loss. (People v. Jennings (2005) 128 Cal. App. 4^th 42, 57.)

Penal Code Section 1202.4 subd. (a)(1) states that it is the intent of the Legislature that a victim of crime who incurs an economic loss as a result of the commission of a crime shall receive restitution directly from a defendant convicted of that crime.

Items of economic loss that the court may order for restitution include:

• Property damage or loss;

• Medical expenses;

• Mental health counseling services;

• Wages or lost profits; and

• Actual and reasonable attorney's fees.

Restitution of attorneys' fees

In People v. Taylor ((2011) 197 Cal. App. 4^th 757), the victim was seriously injured in an automobile accident caused by the defendant, who was criminally charged with felony hit-and-run and several other crimes. The victim engaged a personal injury lawyer to represent him in a civil action. That action was settled with the defendant's insurance carrier before the criminal case had concluded, and the victim's lawyer was paid his 33 1/3 % contingency fee ($8,333) out of the civil case.

In the criminal proceedings, the victim sought restitution of the full amount of the civil attorney's fees. The defendant claimed that the trial court erred in not applying the lodestar method in calculating the attorney's fees.

To establish a reasonable attorney's fee under the lodestar method, the court multiplies the number of hours reasonably expended by a reasonable hourly rate to compute what is the lodestar or touchstone. (Nichols v. City of Taft (2007) 155 Cal. App. 4^th 1233, 1240.)

In Taylor, the court refused to apply the lodestar, instead focusing on the reasonableness of the personal injury attorney's fee. The court stated that it is a rare personal injury plaintiff who has the assets to pay for legal representation on an hourly basis, plus costs.

The court noted that by providing representation on a contingency fee basis, the personal injury lawyer assumes the risk that the claim might not be successful and he would receive nothing, or the case would settle for a low amount and not provide him with adequate compensation.

The court also noted that the civil lawyer finances the case for the client during the pendency of the litigation. The court also found the 33 1/3% was reasonable, as that percentage of the total award was the typical amount paid under a contingency fee contract.

The civil case in which the crime victim (the plaintiff) incurs attorney fees is separate from the criminal case where the restitution is awarded. A crime victim who seeks redress for his injuries in a civil suit can expect to pay counsel with a contingency fee. Victim restitution for attorney's fees, along with all other economic loss, is intended to make the crime victim whole.

The usual remedy granted to the successful plaintiff in a civil case to make him "whole" is a sum of money, often substantial. True, money is frequently an inadequate award for a personal injury. For instance, a plaintiff who loses an arm or a leg due to a defendant's negligence is not really made "whole" by an award of money. But until bioscience and other medical and genetic specialties can reattach the limb to pre-injury functionality, compensation in the form of cold hard cash is the best we can do at present.