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.