Sunday, April 23, 2017

NYS Lawyers' Client Protection Fund Shells Out $9.2 Million To 155 Fleeced Clients Of 48 Sticky-Fingered (Or Dead) Lawyers In 2016; Amount Represents 4th Highest Payout In Fund's 34-Year History

The New York Law Journal reports:
  • The legal clients of dishonest New York lawyers received $9.2 million in reimbursement in 2016 from the state Lawyers' Fund for Client Protection, the fourth-highest payout in the fund's 34 years of existence.(1)

    The 155 awards were made last year to clients defrauded by 48 now suspended, disbarred or deceased lawyers, the fund said in its annual report.

    The only years when more money was paid out of the fund to defrauded clients were in 2015 ($12.3 million), 2000 ($10.5 million) and 1996 ($9.9 million).

    Fund executive director Timothy O'Sullivan said the awards, which averaged $12,800 last year, compensated the wrongdoing of a miniscule percentage of the 311,000 lawyers licensed by New York state.

    The illegal misappropriation of funds held in escrow for clients in real estate transactions and personal injury cases such as auto accidents and slip-and-falls was the most common misconduct for which lawyers' clients qualified for reimbursement last year, the fund reported.

    The fund is composed mainly of money accumulated by a $60 assessment on the $375 biennial registration fee on attorneys in New York.

    The fund provides no reimbursement for representation that does not involve fraud or other illegal activity by lawyers, such as fees for unsuccessful representation or poor investment advice.
Source: Fund Disperses $9.2M to Victims of Lawyer Fraud (may require subscription; if no subscription, GO HERE, then click the appropriate link).
(1) In New York, the Lawyers' Fund for Client Protection was created to provide a source of, at least partial, reimbursement to clients who have suffered monetary losses at the hands of dishonest lawyers licensed and practicing in the state.

According to their website, typical losses reimbursed by the Lawyers' Fund include the theft of estate and trust assets, escrow deposits in real property transactions, settlements in personal injury litigation, debt collection receipts, money embezzled in investment transactions with law clients, and unearned fees paid in advance to lawyers who falsely promise their legal services.

Perhaps the best of all the attorney ripoff reimbursement funds in the U.S. in terms of its payout limits, the Fund places a $400,000 maximum limit, per law client loss, on awards from the Fund, fixed by regulation of the Fund's Trustees. There is no aggregate maximum on awards involving one lawyer.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

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