|N E W S||Additional Information:|
|New York State||Frederick Miller|
|Lawyers Fund for Client Protection||Executive Director & Counsel|
NY Lawyers' Fund Doubles Coverage to $200,000
(Albany, NY 4/23/99). A public-service program financed by the lawyers of New York State to protect legal consumers from dishonest conduct in the practice of law will now provide, for each eligible claim, up to $200,000 in coverage for the misuse of client money and property in the practice of law. The previous limit was $100,000 for each client loss.
The increase was announced by Eleanor Breitel Alter, the Chairman of the Board of Trustees of the New York Lawyers Fund for Client Protection. The Lawyers Fund was created by the State Legislature in 1981 at the urging of the New York State Bar Association.
The Lawyers Fund has distributed more than $73 million in awards of reimbursement to 4800 eligible law clients and escrow beneficiaries since 1982. The awards reimburse thefts by fewer than 600 disbarred and dead lawyers, less than one percent of the 177,000 licensed lawyers in New York State.
Chairman Alter, who is a partner in the Manhattan law firm of Kasowitz, Benson, Torres & Friedman, observed that the Lawyers Fund is financed by a share of every lawyer's license fee, not citizen tax dollars. That fee provides the fund with $8 million annually to reimburse losses if a lawyer is proved guilty of stealing client or escrow money, and is unable to make financial restitution to the lawyer's victims.
The Lawyers Fund is headquartered in Albany. It is administered by a Board of Trustees composed of five lawyers and two business executives who have been appointed by the judges of the state Court of Appeals, New York's high court. The Trustees serve without compensation.
The Trustees are required by law to fix a maximum limit on reimbursement awards from the fund. The typical victim loss amounts to $2,700. The prior maximum limit of $100,000 resulted in full reimbursement to about 95 percent of all eligible victims. The $200,000 limit, Ms. Alter observed, will enable the Trustees to better that record, particularly in claims involving a lawyer's misuse of estate assets and the proceeds of real property transactions.
"Losses in these areas of legal practice are rare," she noted, "but they can be catastrophic for a client or beneficiary. While it is unlikely that the Lawyers Fund can ever promise 100 percent reimbursement to everyone, we hope to get as close to 100 percent as possible."
Typical losses reimbursed by the Lawyers Fund include the theft of estate and trust assets, real estate down payments and the proceeds of real property transactions, escrow funds created in the course of a legal representation, debt collection proceeds, settlement proceeds of personal injury claims, and money embezzled by a lawyer in an investment transaction with a client. The fund does not reimburse for a lawyer's malpractice or neglect, or become involved in fee disputes.
Since 1982, the New York Lawyers Fund has distributed $73,000,000 to 4700 victims of fewer than 600 dishonest attorneys, now disbarred or dead. There are 177,000 lawyers who are licensed to practice law in New York State.
In addition to Ms. Alter, the fund's Trustees are Bernard F. Ashe of Albany; Theodore D. Hoffmann of Hicksville in Nassau County; Charles Joseph Hynes, District Attorney of Kings County; Ray W. Manuszewski of Cheektowaga in Erie County; Eric A. Seiff of Manhattan and the Bronx; and Shirley B. Waters of Rome in Oneida County.
The offices of the Lawyers Fund are located in Albany. Telephone: 800/442-3863. Information about the fund can also be obtained from its Web site on the Internet: www.nylawfund.org.