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New Law Threatens Traditional Process Service in Washington

New Law Threatens Traditional Process Service in Washington State

Process servers in the state of Washington will notice some changes come January 2016 after the quiet passing of Senate bill 5387 into Washington law. The bill, which added new sections highlighting the manner in which process service can be effectuated on registered agents of corporations, may be a harbinger for things to come in terms of electronic service across the U.S. in the process serving industry.

Process servers have long been hand delivering legal documents to the registered agents of companies for various types of legal proceedings. The RAs typically expect the service and accept documents without incident, which has made these kinds of serves highly desirable for process servers.

New Additions

The new sections addressing process service span just five pages and are hidden deep within a 245-page document. Despite its subtle inclusion in the original bill, the ambiguous language of the added sections presents a magnitude of negative implications for process servers because it opens up the door to a variety of other means of service for lawyers, banks, and collection agencies outside of traditional process service. From the text of the bill and soon to be law, it is apparent that those needing service will now be able to turn to certified mail, commercial delivery service (such as FedEx or UPS), and potentially even service by email.

My anticipation is that you would see a slow decline in corporate service, that would snowball from there, and then see hardly any corporate service. If it’s an expense that can be done away with, it will be done away with.

Robin Mullins, 4th Corner

The newly added sections 1405 and 1411 of SB 5387 are as follows:

1405

(2) A commercial-registered-agent listing statement may include the information regarding acceptance by the agent of service of process, notices, and demands in a form other than a written record as provided in section 1411(5) of this act.

1411

If a represented entity ceases to have a registered agent, or if its registered agent cannot with reasonable diligence be served, the entity may be served by registered or certified mail, return receipt requested, or by similar commercial delivery service, addressed to the entity at the entity's principal office. The address of the principal office must be as shown in the entity's most recent annual report filed by the secretary of state. Service is effected under this subsection on the earliest of:

(a) The date the entity receives the mail or delivery by the commercial delivery service;

(b) The date shown on the return receipt, if executed by the entity; or

(c) Five days after its deposit with the United States Postal Service or commercial delivery service, if correctly addressed and with sufficient postage or payment.

(3) If process, notice, or demand cannot be served on an entity pursuant to subsection (1) or (2) of this section, service may be made by handing a copy to the individual in charge of any regular place of business or activity of the entity if the individual served is not a plaintiff in the action.

(4) The secretary of state shall be an agent of the entity for service of process if process, notice, or demand cannot be served on 11 an entity pursuant to subsection (1), (2), or (3) of this section.

(5) Service of process, notice, or demand on a registered agent must be in a written record, but service may be made on a commercial registered agent in other forms, and subject to such requirements, as the agent has stated in its listing under section 1405 of this act that it will accept.

The new law is somewhat ambiguous because it provides for alternative means of service but does not explicitly state what methods of service it would include.  Instead, it is left to the interpretation of the registered agent and it implies that the alternative means of service do not have to be traditional hand delivered service.

What This Means For Process Servers in Washington

Changes such as these could be construed as metaphorical cracks in the foundation of traditional process service in Washington and throughout the US. Electronic service rendering traditional hand-delivered means of process service obsolete has long been the topic of discussion within the industry. But at what point in time — if ever — will these warnings come to fruition? Technology has certainly paved the way for revolutionary industry changes with the advent and widespread, accepted use of GPS, data bridges, and email.

My question is what is the process serving community going to do? Frankly, I don't know and I don't know who does. But I do know, that this change is a big deal if you are a process server who makes his or her living by hand delivering process.

Jeff Karotkin, Service of Process Looking Forward

West coast process service industry leaders Jeff Karotkin and Robin Mullins have warned that these changes could signal a decrease in business for those process servers who regularly serve corporations.

Jeff Karotkin explained on his Service of Process Looking Forward blog that “My question is what is the process serving community going to do? Frankly, I don't know and I don't know who does. But I do know, that this change is a big deal if you are a process server who makes his or her living by hand delivering process. “

Robin Mullins explained in a phone interview that “As of January 1st, my anticipation is that you would see a slow decline in corporate service, that would snowball from there, and then see hardly any corporate service. If it’s an expense that can be done away with, it will be done away with. Basically, it’s what service of process is, a service that a lot of people see as an unnecessary expense. I don’t agree with it, but that’s the way it’s being sold.”

Mullins continued, explaining that “The industry is going to change very rapidly — the next  5-10 years will look much different with changes. Every state should have an association and a lobbyist watching things in their state capital because otherwise, things like this will happen. Next time it will be worse. You can bet that other groups, such as collection agencies, are going to look at this and say how can we adapt that language to our situation. That’s where we’re going to end up with service by electronic means.”

Setting a Precedent

With huge changes like these going virtually unchallenged, it becomes apparent that altering the ways in which service of process can be handled can happen swiftly, which begs the question, at what point does process service become obsolete?

Even with the ability to send forms, motions, etc. electronically, you’re still going to have old-school attorneys that prefer to have you hand carry it. The law, to my understanding, does not preclude attorneys from getting a process server, it just provides other options.

Charles Rhodes, Olympia Process & Investigative Services

Despite warning that process servers could see significantly decreased volume, Mullins clarified that “Down the road, service of process will never become fully electronic, I believe, but the quantity will go down. So, what happens then when you have very few — 500 now down to 50 [serves] in 5 years. What would you do with pricing, anticipating that? Stay in it or leave the business?”

Mullins and Karotkin clearly share similar opinions on making adjustments to and in anticipation of technology and legislation changes from the content of their blogs. However, other process servers view these changes as simply redundant laws that won’t significantly impact their business. We spoke with Charles Rhodes of Olympic Process & Investigative Services, a 21-year civil process service industry veteran, who was not intimidated by the changes: “This might not be what you’re looking for or expecting, but if they decided not to use us as a process server, then so be it. It is what it is. For me, from my standpoint, it doesn’t matter. Even with the ability to send forms, motions, etc. electronically, you’re still going to have old-school attorneys that prefer to have you hand carry it. The law, to my understanding, does not preclude attorneys from getting a process server, it just provides other options.”

Rhodes recently implemented private investigation into his business, but not because of industry changes — instead, he explained he was simply following a passion. His passion might be leading him down the right path, because as legislation changes like these continue to happen, it may become his bread and butter. But then again, process service may persevere.

Moving Forward

While this bill doesn’t affect all types of service process servers handle, it is groundbreaking because it has legislated new, easier, and cheaper ways for the service to get done. The question remains — why would those needing service opt for a more expensive, more cumbersome method of doing business, especially when the easier, cheaper method is within the boundaries of the law for proper service? Will attorneys continue with personalized service because it’s already implemented into their workflow?

Down the road, service of process will never become fully electronic, I believe, but the quantity will go down. So, what happens then when you have very few — 500 now down to 50 [serves] in 5 years. What would you do with pricing, anticipating that?

Robin Mullins, 4th Corner

While other associations are able to employ lobbyists who push to prevent toxic bills, such as this one, from passing legislation, WPSA was unable to keep their lobbyist, presumably due to funding issues. While a lobbyist certainly couldn’t guarantee that he or she could prevent a bill from being passed, they certainly could work toward defeating it, and at the very least, help to make its existence known.

Process service associations are in place to help promote process service and create an educational forum process servers while helping them improve and professionalism in the industry. As non-profits, they rely on members and funding protect and advance the industry.

Mullins noted in our interview that this bill went unchallenged, as the Washington State Process Server Association no longer has a lobbyist vying for the best interests of local process servers. He believes that was the reason this bill passed. Karotkin noted in his blog post that “Some might say that the Washington State Process Servers Association or NAPPS should have done something before this bill passed.”

We will have to wait for January and the months that follow to begin seeing the effects of this bill once the new law goes into effect. If the process serving industry in Washington is negatively impacted by this bill, change will happen — just not overnight. It is business, after all.

What do you think about this bill and the future of process service? Let us know on social media or in the comments.


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