Who Finances the Lawyers’ Fund?
New York’s legal profession financially supports the Lawyers’ Fund. The biennial registration fee required of every practicing attorney in the State is the primary source of revenue for the Lawyers’ Fund. Section 468-a of the Judiciary Law allots $60 of each $375 registration fee, or $30 per year, to the Fund.
No tax dollars are used to finance the Lawyers’ Fund. Also, the Fund does not receive any revenue from the IOLA (Interest on Lawyer Account) program.
The Fund’s other sources of revenue include restitution, interest, judicial sanctions, contributions and unclaimed escrow deposits of missing clients and deceased attorneys held by the Fund for over five years pursuant to court rules.
Who Administers the LawyersFund?
The Court of Appeals appoints the Board of Trustees to administer the Lawyers’ Fund. The Trustees serve renewable three-year terms as a public service, without compensation. Since the Fund was established in 1981, a total of 19 Trustees have served with the Fund. The Board is composed of five members of the bar and two business and community leaders. The Fund’s officers, elected by the Trustees, consist of a Chairman, Vice-Chairman and a Treasurer. The Fund’s Executive Director serves as the Fund’s Chief Administrative Officer and the Board’s Secretary and Counsel.
What losses are covered by the Lawyers’ Fund?
The Trustees may reimburse losses caused by the dishonest conduct of lawyers admitted to the practice of law in New York State, up to a maximum of $400,000 for each client loss. Dishonest conduct includes the misappropriation or wilful misapplication of money, securities or property in the practice of law, and unlawful acts in the nature of theft, larceny, embezzlement, fraud or conversion.
By law, the Fund is unable to consider claims alleging legal malpractice, neglect or fee disputes. Nor can the Fund consider claims for out-of-pocket or consequential damages.
Clients must apply for reimbursement within two years after their loss or the discovery of their loss. Typical losses covered include the theft of money from estates and trusts; escrow funds in real property transactions; settlements in personal injury actions; and money embezzled from clients in investment transactions within an attorney-client relationship and the practice of law.
What is the New York Lawyers’ Fund For Client Protection?
The Lawyers' Fund was established in 1982 to provide reimbursement to law clients who have lost money or property as a result of a lawyer's dishonest conduct in the practice of law. The Lawyers' Fund is a remedy for law clients who cannot get reimbursement from the lawyer who caused the loss, or from insurance or other sources.
What is the claims process?
Each application is screened to see if the loss is eligible for reimbursement. Ineligible claims are dismissed promptly with an explanation why the loss cannot be reimbursed. Eligible claims are investigated and reports prepared for the Trustees. The Trustees meet four time each year to evaluate claims, and determine the amounts of reimbursement that will be allowed.
Losses are not generally reimbursed by the Trustees until a lawyer is disbarred by the New York court system. It's important that clients cooperate fully in all official investigations involving dishonesty in the practice of law.
Is there a time limit for filing claims?
Yes. Clients must apply for reimbursement within two years after they discover their loss.
How do I file a claim?
A completed application for reimbursement along with supporting documentation must be filed with the Fund in order for a law client to be considered for an award of reimbursement. There is no application fee, and clients are not required to be represented by counsel.
Application forms may be downloaded here or may be requested by mail here. Claimants may also write our call the Fund's offices at 119 Washington Avenue, Albany, N.Y. 12210. Telephone 800/442-FUND (3863).
Section 7200.8 (b) of the Trustees’ Regulations instructs that a claimant has the responsibility to provide satisfactory evidence of an eligible loss. Written complaints should also be filed with the appropriate Attorney Grievance Committee and District Attorney’s office.
As mentioned, a claimant does not have to be represented by counsel. As a public service, lawyers in New York State generously assist claimants without charge. Claimants may wish to consult with a lawyer concerning problems or issues raised by their loss. Appellate Division rules and the Trustees’ Regulations prohibit lawyers from charging or accepting legal fees for assisting claimants with the Lawyers’ Fund, except with the prior approval of the Board of Trustees. (22 NYCRR 603.24, 691.24, 806.16, 1022.35 and 22 NYCRR 7200.14).
Are other complaints required?
Yes. The misuse of client money or property is professional misconduct that generally results in disbarment from the practice of law. It is also a crime. A law client who accuses a lawyer of misusing money and property must report the loss to an Attorney Disciplinary (Grievance) Committee; and to the District Attorney in which the lawyer maintained law offices.