RULES OF COURT
IN THE MATTER OF THE ADOPTION OF AMENDMENTS TO THE LAWYERS FUND FOR CLIENT PROTECTION PROCEDURAL RULES 6J (1) AND (2) AND 7A | ) ) ) ) ) |
ORDER NO. 25700-A-716 |
Now, therefore, it is hereby
ORDERED:
That the amendments to the Lawyers Fund for Client Protection Procedural Rules 6J (1) and (2) and 7A as attached are adopted to become effective immediately
DATED at Olympia, Washington this 6th day of December 2001.
Alexander, C.J. |
|
Smith, J. |
Ireland, J. |
Johnson, J. |
Bridge, J. |
Madsen, J. |
Chambers, J. |
Sanders, J. |
Owens, J. |
WASHINGTON STATE BAR ASSOCIATION
Lawyers' Fund for Client Protection (APR 15)
Procedural Rules
(Adopted by the Washington Supreme Court July 18, 1995; amended
February 11, 1997; May 6, 1999; September 14, 2001)
RULE 1. PURPOSE
A. The purpose of these rules is to establish procedures pursuant
to Rule 15 of the Admission to Practice Rules, to maintain and
administer a Lawyers' Fund for Client Protection established as a
trust by the Washington State Bar Association (WSBA), in order to
promote public confidence in the administration of justice and
the integrity of the legal profession.
B. Funds accruing and appropriated to the Fund may be used for
the purpose of relieving or mitigating a pecuniary loss sustained
by any person by reason of the dishonesty of, or failure to
account for money or property entrusted to, any member of the
WSBA in connection with the member's practice of law, or while
acting as a fiduciary in a matter related to the member's
practice of law. Such funds may also, through the Fund, be used
to relieve or mitigate like losses sustained by persons by reason
of similar acts of an individual who was at one time a member of
the WSBA but who was at the time of the act complained of under a
court ordered suspension.
C. The Fund shall not be used for the purpose of relieving any
pecuniary loss resulting from an attorney's negligent performance
of services.
RULE 2. ESTABLISHMENT OF THE FUND.
A. Trustees. Pursuant to APR 15, the members of the Board of
Governors of the WSBA will serve during their terms of office as
Trustees (Trustees) for the Fund to hold funds assessed by the
Supreme Court for the purposes of the Fund. The WSBA President
will serve as President of the Trustees.
B. Funding. The Trustees may recommend to the Supreme Court that
it order an annual assessment of all active members of the WSBA
in an amount recommended by the Trustees to be held by them in
trust for the purposes of the Fund.
C. Enforcement. Any active member failing to pay any annual
assessment on or before the date set for payment by the Supreme
Court shall, after 60 days written notice sent to his or her last
known business address as shown in the records of the WSBA, be
ordered suspended from the practice of law until the assessment
is paid.
RULE 3. LAWYERS' FUND FOR CLIENT PROTECTION COMMITTEE
A. Membership. The Lawyers Fund for Client Protection Committee
shall consist of 11 lawyers and 2 nonlawyers appointed by the
Trustees for terms not exceeding 3 years each.
B. Vacancies. Vacancies on the Committee shall be filled by
appointment of the Trustees.
C. Officers. The Trustees shall appoint a chairperson of the
Committee for a term of one-year or until a successor is
appointed. The secretary of the Committee shall be a staff
member of the WSBA assigned to the Committee by the Executive
Director of the WSBA.
D. Meetings. The Committee shall meet not less than once per
year upon call of the chairperson, or at the request of the staff
member of the WSBA, who shall not be entitled to vote on
Committee matters.
E. Quorum. A majority of the Committee members, excluding the
secretary, shall constitute a quorum.
F. Record of Meetings. The secretary shall maintain minutes of
the Committee deliberations and recommendations.
G. Authority and Duties of Committee. The Committee shall have
the power and authority to:
(1) Consider claims for reimbursement of pecuniary loss and
make a report and recommendation regarding payment or nonpayment
on any claim to the Trustees.
(2) Provide a full report of its activities annually to the
Supreme Court and the Trustees and to make other reports and to
publicize its activities as the Court or Trustees may deem
advisable.
H. Conflict of Interest.
(1) A Committee member who has or has had a lawyer/client
relationship or financial relationship with an applicant or
lawyer who is the subject of an application shall not participate
in the investigation or deliberation of an application involving
that applicant or lawyer.
(2) A Committee member with a past or present relationship,
other than that as provided in section (1), with an applicant or
lawyer who is the subject of an application, shall disclose such
relationship to the Committee and, if the Committee deems it
appropriate, that member shall not participate in any action
relating to that application.
RULE 4. APPLICATIONS FOR PAYMENT
A. Application Form. All applications for payment through the
Lawyers Fund for Client Protection shall be made by submitting an
application on a form approved by the Committee, and shall
include all information requested on the form.
B. Disciplinary Complaints. Any person who has filed a
disciplinary complaint with the WSBA alleging a loss occasioned
by the dishonest conduct of a lawyer should be provided with a
Lawyers Fund for Client Protection application form and given
information about the Fund.
RULE 5. ELIGIBLE CLAIMS
A. Eligibility. To be eligible for payment from the Fund, the
loss must be caused by the dishonest conduct of a lawyer or the
failure to account for money or property entrusted to a lawyer in
connection with the lawyer's practice of law, or while acting as
a fiduciary in a matter related to the lawyer's practice of law.
B. Time Limitations. Any application must be made within three
years from the date on which discovery of the loss was made or
reasonably should have been made by the applicant, and in no
event more than three years from the date the lawyer dies, is
disbarred, is disciplined for misappropriation of funds, or is
criminally convicted for matters relating to the applicant's
loss, provided that the Trustees in their discretion may waive
any limitations period for excusable neglect or other good cause.
C. Dishonest Conduct. As used in these rules, "dishonest
conduct" or "dishonesty" means wrongful acts committed by a
lawyer in the nature of theft or embezzlement of money or the
wrongful taking or conversion of money, property or other thing
of value, including but not limited to refusal to refund unearned
fees as required by Rule 1.15 of the Rules of Professional
Conduct.
D. Excluded Losses. Except as provided by Section E of this
Rule, the following losses shall not be reimbursable:
(1) Losses incurred by partners and associates of the lawyer
causing the loss;
(2) Losses covered by any bond, surety agreement, or
insurance contract to the extent covered thereby, including any
loss to which any bonding agent, surety, or insurer is
subrogated, to the extent of that subrogated interest;
(3) Losses incurred by any financial institution which are
recoverable under a "banker's blanket bond" or similar commonly
available insurance or surety contract;
(4) Losses incurred by any business entity controlled by the
lawyer or any person or entity described in Rule 5 D (1), (2) or
(3);
(5) Losses incurred by any governmental entity or agency;
E. Special and Unusual Circumstances. In cases of special and
unusual circumstances, the Committee may, in its discretion,
consider an application which would otherwise be excluded by
reason of the procedural requirements of these rules.
F. Unjust Enrichment. In cases where it appears that there will
be unjust enrichment, or that the applicant contributed to the
loss, the Committee may, in its discretion, recommend the denial
of the application.
RULE 6. PROCEDURES
A. Ineligibility. Whenever it appears that an application is not
eligible for reimbursement pursuant to Rule 5, the applicant
shall be advised of the reasons why the application may not be
eligible for reimbursement.
B. Investigation and Report. The WSBA staff member assigned to
the Committee shall conduct an investigation regarding any
application. The investigation may be coordinated with any
disciplinary investigation regarding the lawyer. The staff
member shall report to the Committee and make a recommendation to
the Committee.
C. Notification of Lawyer. The lawyer, or his or her
representative, regarding whom an application is made shall be
notified of the application and provided a copy of it, and shall
be requested to respond within 20 days. A copy of these Rules
shall be provided to the lawyer or representative.
D. Testimony. The Committee may request that testimony be
presented to complete the record. Upon request, the lawyer or
applicant, or their representatives, may be given an opportunity
to be heard at the discretion of the Committee.
E. Finding of Dishonest Conduct. The Committee may make a
finding of dishonest conduct for purposes of considering an
application. Such a determination is not a finding of dishonest
conduct for purposes of professional discipline.
F. Evidence and Burden of Proof. Consideration of an application
need not be conducted according to technical rules relating to
evidence, procedure and witnesses. Any relevant evidence shall
be admitted if it is the sort of evidence commonly accepted by
reasonably prudent persons in the conduct of their affairs. The
applicant shall have the burden of establishing eligibility for
reimbursement by a clear preponderance of the evidence.
G. Pending Disciplinary Proceedings. Unless the Trustees
otherwise direct, no application shall be acted upon during the
pendency of a disciplinary proceeding or investigation involving
the same act or conduct that is alleged in the claim.
H. Exhaustion of Remedies. The Committee may direct an applicant
to seek reimbursement of a loss before making a recommendation to
the Trustees on an application. This may include, but is not
limited to, the following:
(1) File a claim with the lawyer's insurance carrier;
(2) File a claim on a bond, when appropriate;
(3) File a claim with any and all banks which honored a
financial instrument with a forged endorsement;
(4) Request payment in writing from any lawyer who was a
partner of the dishonest lawyer at the time of the dishonest
conduct; or any lawyer who was a principal of the professional
corporation in which the dishonest lawyer was an employee or
member; or against the employer of the dishonest lawyer; or
(5) Commence appropriate legal action against the lawyer or
against any third party or entity who may be liable for the
applicant's loss.
I. Public Participation. Public participation at Committee
meetings shall be permitted only by prior permission granted by
the Committee chairperson.
J. Committee Action.
(1) Actions of the Committee Which Are Final Decisions. A
decision by the Committee on an application for payment of
$10.000 or less -- whether such decision be to make payment, to
deny payment, to defer consideration, or for any action other
than payment of more than $10,000 -- shall be final and without
right of appeal to the Trustees. [amended 9/14/01; to be
reviewed in 1 year].
(2) Actions of the Committee Which Are Recommendations to
the Trustees. A decision by the Committee (a) on an application
for more than $10.000, or (b) involving a payment of more than
$10,000 (regardless of the amount stated in the application), is
not final and is a recommendation to the Trustees which shall
have sole authority for final decisions in such cases.
RULE 7. ADJUDICATION BY TRUSTEES
A. A recommendation by the Committee (a) concerning applications
for more than $10,000, or (b) that payments of more than $10,000
be made to applicants regarding any one lawyer, shall be reported
to the Trustees which may, in its discretion, adopt, modify,
disapprove or take any other appropriate action on the
Committee's recommendation.
B. A decision of the Trustees shall be final and there shall be
no right of appeal from that decision.
RULE 8. NOTIFICATION OF APPLICANT AND LAWYER
Both the applicant and the lawyer who is the subject of an application shall be advised of any decision of the Committee or the Trustees.
RULE 9. LIMITATIONS ON AMOUNT OF REIMBURSEMENT
The Trustees may, at their discretion, set limitations on
the amount of reimbursement.
RULE 10. NO LEGAL RIGHT TO PAYMENT
Any and all payments made to applicants in connection with
the Lawyers' Fund for Client Protection are gratuitous and are at
the sole discretion of the Trustees.
RULE 11. RESTITUTION AND SUBROGATION
A. Restitution. A lawyer whose conduct results in payment to an
applicant shall be liable to the Fund for restitution, and the
Trustees may bring such action as they deem advisable to enforce
restitution.
B. Subrogation. As a condition of payment, an applicant shall be
required to provide the Fund with a pro tanto transfer of the
applicant's rights against the lawyer, the lawyer's legal
representative, estate or assigns; and of the claimant's rights
against any third party or entity who may be liable for the
applicant's loss.
C. Action to Enforce Restitution. In the event the Trustees
commence a judicial action to enforce restitution, they shall
advise the applicant who may then join in the action to recover
any unreimbursed losses. If the applicant commences such an
action against the lawyer or another entity who may be liable for
the loss, the applicant shall notify the Fund who may join in the
action.
D. Duty to Cooperate. As a condition of payment, the applicant
shall be required to cooperate in all efforts that the Fund
undertakes to achieve restitution.
RULE 12. COMPENSATION FOR REPRESENTING APPLICANTS
No lawyer shall charge or accept any payment for prosecuting
an application on behalf of an applicant, unless such charge or
payment has been approved by the Trustees.
RULE 13. CONFIDENTIALITY
A. Matters Which Are Public. The facts and circumstances which
generated the loss, the Committee's findings of fact and
recommendations to the Trustees with respect to payment of a
claim, the amount of claim, the amount of loss as determined by
the Committee, and the amount of payment authorized and made,
shall be public. After payment is authorized, the name of the
lawyer causing the loss shall be public.
B. Matters Which Are Not Public. The Committee's investigation
and deliberations of any application; the name of the applicant,
unless the applicant consents; or the name of the lawyer unless
the lawyer consents or unless the lawyer's name is made public
pursuant to these rules, shall not be public.
RULE 14. AMENDMENTS
These Rules may be amended, altered or repealed on the
recommendation of the Committee by a vote of the Trustees, with
the approval of the Supreme Court.
Reviser's note: The typographical error in the above material occurred in the copy filed by the State Supreme Court and appears in the Register pursuant to the requirements of RCW 34.08.040.
Reviser's note: The brackets and enclosed material in the text of the above section occurred in the copy filed by the State Supreme Court and appear in the Register pursuant to the requirements of RCW 34.08.040.