Focus on the Law: Lawyers’ fund for client protection

By Sharon Frankenberg,
Attorney at Law

More than 30 years ago the Tennessee Supreme Court established the Tennessee Lawyers’ Fund for Client Protection (hereinafter referred to as “the Fund”) to reimburse clients for financial losses caused by dishonest acts of an attorney during the attorney-client relationship. Specifically, the purpose of the Fund is to “promote public confidence in the administration of justice and the integrity of the legal profession as a whole by reimbursing losses caused by the rare instance of dishonest conduct of lawyers practicing in this state.” Supreme Court Rule 25 Section 1.02. “This fund is now supported entirely by Tennessee lawyers – all willing to take responsibility for the actions of the unscrupulous few,” said Supreme Court Chief Justice Gary Wade. All attorneys who practice in Tennessee must pay an annual fee to support the Fund.

The Fund is governed by a board of directors composed of six lawyers and three non-lawyers equally representing the three Grand Divisions of Tennessee. Board members are nominated by bar associations in the state and are selected by the Supreme Court. Members serve without compensation and typically serve 3 year terms. Board members receive, evaluate, determine and pay claims. Approval of a claim requires the affirmative vote of a majority of members present. Decisions of the Board are final and not subject to review by any court.

Claims made against the Fund must be filed within three years of the date a loss occurred or reasonably should have been discovered. In no event may a claim be filed more than five years from the date of loss. No payment from the Fund shall include interest, costs or attorneys’ fees accrued as a result or consequence of prosecuting the claim before the Board unless approved by the Board. This does not apply to the seeking of a civil judgment and other actions taken by lawyers on behalf of claimants. The Board may require claimants seeking more than $1,000 to obtain a judgment against the offending lawyer or former lawyer. Claimants may be able to receive payment from the Fund if they are unable to collect this judgment after reasonable efforts.

Payment of claims is capped at $100,000 for a loss sustained by any one claimant and at an aggregate of $250,000 with respect to losses caused by any one lawyer or former lawyer. No payment shall exceed $250,000 per transaction regardless of the number of person aggrieved or the amount of loss. The Board has complete authority to allocate payments and pay in lump sums or installments.

In order to file a claim you need to complete a 4-page claim form, have it notarized and sign a release and consent form. The claim form can be found on the Board of Professional Responsibility’s website www.tbpr.org/consumers or you can call the Board at 1-800-486-5714. You should expect to provide identifying information about yourself and the lawyer who caused your loss; specify what money or property was taken from you; provide documentation to help prove your loss; report all actions you have taken to try to recover your loss prior to filing a claim; and swear to the information contained in the claim form.  You should always contact an attorney for legal advice concerning your specific situation.

 

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