New York City Passes Tougher Process Server Licensing and Regulations
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The deliberate failure by some process servers to deliver the notification of a court filing followed by a false affidavit of successful delivery has been described “as a rising problem” in New York City and was outlined in our article “Fraudulent Service of Process Continues to Plague New York” published in October 2009. In response, the New York City Council has passed legislation with new, stringent regulations for service of process in their effort to directly protect consumers from improper delivery of court filing notifications, known as’ ‘Sewer Service’.
The newly passed bill requires all process servers serving process in New York City adhere to the following:
- Obtain a license from the Department of Consumer Affairs (DCA) and pass an examination on the New York Rules of Civil Procedure;
- Log all service attempts when serving papers with an electronic system (such as a GPS system);
- Maintain records and electronic service logs for a period of seven years;
- Independent process servers must obtain a $10,000 surety bond;
- Process serving companies must obtain a $100,000 surety bond with the city to guarantee compliance with the regulations;
- Provide a statement of employee rights and employer responsibilities to every process server under their employ; and
- Maintain signed documents that employees understand these rights and responsibilities.
The new NYC legislation (Int 0006-2010, Version A) reads as follows:
A Local Law to amend the administrative code of the city of New York, in relation to process servers.
Be it enacted by the Council as follows:
Section 1. Section 20-403 of the administrative code of the city of New York is amended to read as follows:
a. Process server license. It shall be unlawful for any person to do business as, be employed as or perform the services of a process server without a license therefor.
b. Process serving agency license. It shall be unlawful for any process serving agency to assign or distribute process to individual process servers for actual service in the city of New York without a license therefore.
§2. Section 20-404 of the administrative code of the city of New York is amended to read as follows:
a. A process server is a person engaged in the business of serving or one who purports to serve or one who serves personally or by substituted service upon any person, corporation, governmental or political subdivision or agency, a summons, subpoena, notice, citation or other process, directing an appearance or response to a legal action, legal proceeding or administrative proceedings.
b. A process serving agency is any person, firm, partnership, association or corporation, other than an attorney or law firm located in this state, or city marshal, who maintains an office, bureau or agency, the purpose of which is to assign or distribute process to individual process servers for actual service in the city of New York.
c. For the purposes of this subchapter the service of five or more process in any one year shall be deemed to constitute doing business as a process server.
§3. Section 20-406 of the administrative code of the city of New York is amended by adding a new subdivision c to read as follows:
c. Each such applicant for a process server license or renewal thereof shall be required to pass an examination satisfactorily. Such examination shall be under the supervision of the commissioner and shall test the knowledge of the applicant concerning proper service of process within the city of New York and familiarity with relevant laws and rules.
§4. Subchapter 23 of chapter 2 of title 20 of the administrative code of the city of New York is amended by adding new sections, 20-406.1, 20-406.2, 20-406.3 and 20-406.4 to read as follows:
20-406.1 Bond required.
a. As a condition of the issuance of a process server license, each applicant for such license or a renewal thereof shall furnish to the commissioner a surety bond executed by the applicant in the sum of ten thousand dollars, payable to the city of New York, and a surety approved by the commissioner. Such bond shall be conditioned upon the applicant’s compliance with the provisions of this subchapter and any rules promulgated thereunder, and upon the further condition that the applicant will pay (i) to the city any fine, penalty or other obligation the city imposes relating to a violation of this subchapter and any rules promulgated thereunder, and (ii) to a plaintiff any final judgment recovered in an action arising out of the violation of any of the provisions of this subchapter within thirty days of its imposition. If an applicant is unable to obtain a surety bond as required by this section, and upon the provision of proof satisfactory to the commissioner of such inability, the individual applicant may, in lieu of furnishing such bond, deposit an amount of no less than one thousand dollars in a fund to be established by the commissioner to pay (i) to the city any fine, penalty or other obligation the city imposes relating to a violation of this subchapter and any rules promulgated thereunder, and (ii) to a plaintiff any final judgment recovered in an action arising out of the violation of any of the provisions of this subchapter within thirty days of its imposition.
b. A process server licensed under this subchapter who engages in the business of serving process exclusively as an employee of a process serving agency licensed under this subchapter shall not be required to furnish a surety bond.
c. As a condition of the issuance of a process serving agency license, each applicant for such license or a renewal thereof shall furnish to the commissioner a surety bond in the sum of one hundred thousand dollars executed by the applicant payable to the city of New York, and a surety approved by the commissioner. Such bond shall be conditioned upon the applicant’s compliance with the provisions of this subchapter and any rules promulgated thereunder, and upon the further condition that the applicant will pay (i) to the city any fine, penalty or other obligation the city imposes relating to a violation of this subchapter and any rules promulgated thereunder, and (ii) to a plaintiff any final judgment recovered in an action arising out of the violation of any of the provisions of this subchapter within thirty days of its imposition.
§20-406.2 Responsibilities of process serving agencies.
Every process serving agency licensed under this subchapter shall:
a. Comply with all applicable state and federal laws;
b. Be legally responsible for any failure to act in accordance with the laws and rules governing service of process by each process server to whom it has distributed, assigned or delivered process for service;
c. Provide to each process server employed by such agency a written statement indicating the rights of such employee and the obligations of the process serving agency under city, state and federal law. Such statement of rights and obligations shall include, but not be limited to, a general description of employee rights and employer obligations pursuant to laws regarding minimum wage, overtime and hours of work, record keeping, social security payments, unemployment insurance coverage, disability insurance coverage and workers’ compensation;
d. Keep on file in its principal place of business for a period of three (3) years a statement for each employee, signed by such employee, indicating that the employee read and understood the statement of rights and obligations such employee received pursuant to subdivision (c) of this section.
§20-406.3 Records, Audits.
a. Every process server and process serving agency licensed under this subchapter shall retain records in compliance with section 89-cc of the New York state general business law for no less than seven (7) years of each process served. Such records shall be retained in electronic form. Tampering with any such electronic records shall be prohibited.
b. A process server licensed under this subchapter who engages in the business of serving process exclusively as an employee of a process serving agency licensed under this subchapter shall not be subject to the provisions of subdivision (a) of this section, but shall be required to comply with all other applicable laws.
c. The commissioner may conduct audits of the information required to be kept pursuant to subdivision (a) of this section in order to monitor compliance with this subchapter.
§20-406.4 Educational materials.
The commissioner shall develop educational materials to be provided to all process servers and process serving agencies licensed under this subchapter. Such materials shall at a minimum identify the laws and regulations pertaining to service of process in the city of New York.
§5. Section 20-409 of the administrative code of the city of New York is amended by adding a new subdivision c to read as follows:
c. Upon application for renewal of a license issued pursuant to this subchapter, applicants subject to subdivision (a) of section 20-406.3 of this subchapter shall certify in writing compliance with the record keeping provisions of such section.
§6. Subchapter 23 of chapter 2 of title 20 of the administrative code of the city of New York is amended by adding new sections 20-409.1 and 20-409.2 to read as follows:
§20-409.1 Violations and penalties.
Any person who, after notice and hearing shall be found guilty of violating any provision of this subchapter, shall be punished in accordance with the provisions of chapter one of this title and shall be subject to a penalty of not less than seven hundred dollars nor more than one thousand dollars for each violation.
§20-409.2 Civil Cause of Action.
Any person injured by the failure of a process server to act in accordance with the laws and rules governing service of process in New York state, including this subchapter and regulations promulgated thereunder, shall have a cause of action against such process server and process serving agency, which distributed or assigned process for service, in any court of competent jurisdiction for any or all of the following relief:
a. compensatory and punitive damages, provided that punitive damages shall only be awarded in the case of willful failure to serve process;
b. injunctive and declaratory relief;
c. attorneys’ fees and costs; and
d. such other relief as a court may deem appropriate.
§20-409.3 Reporting.
Twenty-four months after the local law that added this section becomes effective, the commissioner shall submit a report to the speaker of the council regarding the effectiveness of these provisions on effectuating proper service and improving oversight over the process service industry. Such report shall include, among other things, the results of audits the commissioner has completed of process servers and process serving agencies, including information regarding their compliance with the provisions of this subchapter.
§ 7. Subchapter 23 of chapter 2 of title 20 of the administrative code of the city of New York is amended by adding a new section 20-410 to read as follows:
§ 20-410 Electronic record of service.
A process server licensed pursuant to this subchapter shall carry at all times during the commission of his or her licensed activities and operate at the time process is served or attempted an electronic device that uses a global positioning system, wi-fi device or other such technology as the Commissioner by rule shall prescribe to electronically establish and record the time, date, and location of service or attempted service. All records created by such electronic device shall be maintained in an electronic database by the process server, or if such process server is acting exclusively as an employee of a process service agency, by the process service agency, for seven (7) years from the date such record is created.
§8. This local law shall take effect one hundred eighty days after enactment provided, however that the commissioner of consumer affairs shall take all actions necessary for its implementation, including the promulgation of rules, prior to such effective date and except that section 20-410 shall take effect sixty days after the adoption of rules promulgated pursuant to such section.
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So in layman’s terms, we just got screwed?
I want to know – the NYC DCA mandates that we have to have all of these electronic systems – are they going to be providing them to us servers? Are they going to give us some type of ‘allowance’ or ‘debit’ from our license? What kind of shit do they think this is accomplish besides people abandoning the business?
Now they want us to keep records for SEVEN (7) years? That sounds like BS to me. We aren’t attorneys.
So in layman’s terms, we just got screwed?
I want to know – the NYC DCA mandates that we have to have all of these electronic systems – are they going to be providing them to us servers? Are they going to give us some type of ‘allowance’ or ‘debit’ from our license? What kind of shit do they think this is accomplish besides people abandoning the business?
Now they want us to keep records for SEVEN (7) years? That sounds like BS to me. We aren’t attorneys.
This will probably take some getting used to, but the problem is that the attorneys that do collection work as well as other cases refuse to pay a decent wage for services. Ive never lost a traverse hearing in over 20 years of serving process, but then again I refuse to serve any paper for the $8 to $10 that some companies offer for these kind of papers. Some attorneys refuse to pay for their bad addresses; others dont want to pay for copies, mailings, or other forms of proof of service. I refuse to serve for such low quality attorneys.
Licensed and bonded is a good thing. GPS is also a good thing… Process servers need to stop working for peanuts and force up the pay so that we can make the money worthy of a good service.
This will probably take some getting used to, but the problem is that the attorneys that do collection work as well as other cases refuse to pay a decent wage for services. Ive never lost a traverse hearing in over 20 years of serving process, but then again I refuse to serve any paper for the $8 to $10 that some companies offer for these kind of papers. Some attorneys refuse to pay for their bad addresses; others dont want to pay for copies, mailings, or other forms of proof of service. I refuse to serve for such low quality attorneys.
Licensed and bonded is a good thing. GPS is also a good thing… Process servers need to stop working for peanuts and force up the pay so that we can make the money worthy of a good service.
I think process servers will come out ok and eventually this will work out.
Rob
I think process servers will come out ok and eventually this will work out.
Rob
New York State and NYC in particular, is becoming the worse place in the country to do any kind of business in.
I would like to see the response if a law was proposed requiring all city workers or government bureaucrats to wear or use a GPS monitoring system to track their whereabouts. Or even a common criminal being expected to do this.
I already have a PI License for the State Of New York and am bonded. Why must I go through this BS to serve papers in NYC? The last time I recall, NYC is part of New York State. Yet NYC refuses to honor many state issued licenses and instead impose their own costly and draconian licensing rules and regulations upon us. Since NYC seems to believe they are not part of NYS, maybe it is time to cut state funding to this city.
And Mr. Olsen is 100% correct about the cheap skate attorneys, low ballers and give away artists in the PI and Process Service business. And it is not just process servers who are working for peanuts. New York PI’s need to stop working for peanuts as well and stop sucking up to clients just to get a case. And the state needs to crack down on unlicensed operators selling background checks and masquerading as employee and tenant screening companies on the internet.
As for New York Attorneys, it has gotten to the point where I rarely ever return phone calls to attorneys. And when I do, I ask for my money up front and that usually ends the conversation. They want to charge $300.00 an hour for their services or recieve 1/3 of a million dollar settlement or more, but we are supposed to do their leg work for less money than they pay their gardners, babysitter and house keepers. And in addition, they expect us to wait until they settle their cases before paying us.
I once had a case with a personal injury attorney who had a $300,000.00 settlement offer on the table and griped because I charged him $100.00 to take some photographs for the case. The kicker is, with a personal injury case, the investigator’s fees are charged back to the client and are deducted from the client’s share of the settlement.
It is time for NY PI’s to stop lying down for this nonsense rather than acting like a bunch of sheep tripping over themselves for business and to comply with these nonsensible new knee jerk laws that are constantly being passed against our industry. This why as a PI in New York, I refuse to belong to any PI Associations. Where are these associations when these laws are being passed?
I wonder if any of those who engaged in sewer service were prosecuted? If so, I am certain all they received was a slap on the wrist while the rest of us have our whereabouts monitored by GPS and fork another licensing and bond fee.
New York State and NYC in particular, is becoming the worse place in the country to do any kind of business in.
I would like to see the response if a law was proposed requiring all city workers or government bureaucrats to wear or use a GPS monitoring system to track their whereabouts. Or even a common criminal being expected to do this.
I already have a PI License for the State Of New York and am bonded. Why must I go through this BS to serve papers in NYC? The last time I recall, NYC is part of New York State. Yet NYC refuses to honor many state issued licenses and instead impose their own costly and draconian licensing rules and regulations upon us. Since NYC seems to believe they are not part of NYS, maybe it is time to cut state funding to this city.
And Mr. Olsen is 100% correct about the cheap skate attorneys, low ballers and give away artists in the PI and Process Service business. And it is not just process servers who are working for peanuts. New York PI’s need to stop working for peanuts as well and stop sucking up to clients just to get a case. And the state needs to crack down on unlicensed operators selling background checks and masquerading as employee and tenant screening companies on the internet.
As for New York Attorneys, it has gotten to the point where I rarely ever return phone calls to attorneys. And when I do, I ask for my money up front and that usually ends the conversation. They want to charge $300.00 an hour for their services or recieve 1/3 of a million dollar settlement or more, but we are supposed to do their leg work for less money than they pay their gardners, babysitter and house keepers. And in addition, they expect us to wait until they settle their cases before paying us.
I once had a case with a personal injury attorney who had a $300,000.00 settlement offer on the table and griped because I charged him $100.00 to take some photographs for the case. The kicker is, with a personal injury case, the investigator’s fees are charged back to the client and are deducted from the client’s share of the settlement.
It is time for NY PI’s to stop lying down for this nonsense rather than acting like a bunch of sheep tripping over themselves for business and to comply with these nonsensible new knee jerk laws that are constantly being passed against our industry. This why as a PI in New York, I refuse to belong to any PI Associations. Where are these associations when these laws are being passed?
I wonder if any of those who engaged in sewer service were prosecuted? If so, I am certain all they received was a slap on the wrist while the rest of us have our whereabouts monitored by GPS and fork another licensing and bond fee.
I will be applying for a NY PI license shortly. Thankfully, I live and plan to work on Long Island. This law NYC passed has to be one of the dumbest pieces of legislation ever. Then again, in the peoples republic of NYC what can one expect. BTW, since I will be retiring from a state investigator job after many years my main income will be my state pension, and will take only the cases I want to take and will charge accordingly. If potential clients do not like my prices they can go elsewhere. “You get what you pay for.”
I will be applying for a NY PI license shortly. Thankfully, I live and plan to work on Long Island. This law NYC passed has to be one of the dumbest pieces of legislation ever. Then again, in the peoples republic of NYC what can one expect. BTW, since I will be retiring from a state investigator job after many years my main income will be my state pension, and will take only the cases I want to take and will charge accordingly. If potential clients do not like my prices they can go elsewhere. “You get what you pay for.”
I am on month two, using a photo/gps program for the company I serve for. While alot of these programs are still in the testing phase, I must admit, it cover the accountability issue quite well. A few bad eggs down state have made us look pretty lazy and
I am on month two, using a photo/gps program for the company I serve for. While alot of these programs are still in the testing phase, I must admit, it cover the accountability issue quite well. A few bad eggs down state have made us look pretty lazy and
I have followed with great interest the proposed NY Law,
and have sent meny communications to DCA asking them to review our
GPS software so that we could be certain it was in full compliancs with NY laws. They did not respond to any correspondence.
Our company and others (i.e. Loyalpuppy) have worked hard to
incorporate GPS functionality and reporting into our software
and I have spoken to various industry folks about the pros and cons of this new law.
Personally, I don’t think it is a 100% cure. Many servers will find a way to circumvent the law if they are incurable lawbreakers, and I am aware that passage of this law will hurt many honest
process servers, and perhaps drive them out of business.
Various servers recently asked me this question: “If a server were to go to a residence to serve a paper, and took a GPS photo….is this proof that the server actually served the paper?”
I believe that there are less cumbersome ways to curb phoney services, and I’m sure that many of you have some suggestions,
but any time we tried to give some input to DCA….no response.
Guess we’ll all have to sit tight and see how this thing plays out.
If you feel you must purchase GPS software to manage your business today….contact the popular software vendors, Loyal Puppy, Case Manager, Process Server Toolbox and others…ask questions…find out how the GPS features work…then contact DCA and see if they will tell you what your favorite software program is lacking to enable that firm to bring its software into full compliance with NY laws.
Maybe the DCA will respond to you….
Howard Brooks
Case Manager Software
http://www.casemanager.info
(925) 236-1875
I have followed with great interest the proposed NY Law,
and have sent meny communications to DCA asking them to review our
GPS software so that we could be certain it was in full compliancs with NY laws. They did not respond to any correspondence.
Our company and others (i.e. Loyalpuppy) have worked hard to
incorporate GPS functionality and reporting into our software
and I have spoken to various industry folks about the pros and cons of this new law.
Personally, I don’t think it is a 100% cure. Many servers will find a way to circumvent the law if they are incurable lawbreakers, and I am aware that passage of this law will hurt many honest
process servers, and perhaps drive them out of business.
Various servers recently asked me this question: “If a server were to go to a residence to serve a paper, and took a GPS photo….is this proof that the server actually served the paper?”
I believe that there are less cumbersome ways to curb phoney services, and I’m sure that many of you have some suggestions,
but any time we tried to give some input to DCA….no response.
Guess we’ll all have to sit tight and see how this thing plays out.
If you feel you must purchase GPS software to manage your business today….contact the popular software vendors, Loyal Puppy, Case Manager, Process Server Toolbox and others…ask questions…find out how the GPS features work…then contact DCA and see if they will tell you what your favorite software program is lacking to enable that firm to bring its software into full compliance with NY laws.
Maybe the DCA will respond to you….
Howard Brooks
Case Manager Software
http://www.casemanager.info
(925) 236-1875
i have had a lot of problems as a pro se litigant with process servers in nyc where can i file a complaint?
i have had a lot of problems as a pro se litigant with process servers in nyc where can i file a complaint?