Current through Register Vol. 46, No. 12, March 20, 2024
(a) The trustees shall consider claims
for the reimbursement of losses caused by the dishonest conduct of attorneys
admitted to practice in New York State, provided that:
(1) the dishonest conduct alleged in
the claim constituted the wrongful taking of money, securities or other
property belonging to a law client or other person who entrusted it with an
attorney admitted to the practice of law in New York State;
(2) the dishonest conduct
occurred in the practice of law by an attorney admitted to practice law in New
York State;
(3)
there is, in the trustees' discretion, a sufficient nexus between the dishonest
conduct alleged in the claim and the practice of law in New York
State;
(4) the claim
is made directly by the client or other person, or their
representative;
(5)
the loss occurred or was discovered on or after June 1, 1981; and
(6) unless the trustees decide
otherwise, the attorney has been suspended or removed from practice, is dead,
or the attorney's whereabouts cannot be determined.
(b) The claimant shall have
the responsibility to provide satisfactory evidence of an eligible
loss.
(c) For the
purposes of this section, dishonest conduct shall include the misappropriation
or willful misapplication of money, securities or property in the practice of
law; and unlawful acts in the nature of theft, larceny, embezzlement, fraud or
conversion.
(d)
Losses not eligible for reimbursement include damages resulting from an
attorney's negligence, malpractice or neglect; losses incurred by government
agencies; losses incurred by financial institutions; losses incurred by
business organizations having 20 or more employees; and losses arising from
financial transactions with attorneys that do not occur within an attorney-
client relationship and the practice of law.
(e)
(1) In a loss resulting from an
attorney's refusal or failure to refund an unearned legal fee as required by
the Lawyer's Code of Professional Responsibility, dishonest conduct shall
include an attorney's misrepresentation, or false promise, to provide legal
services to a law client in exchange for the advance payment of a legal
fee.
(2) An
attorney's failure to perform or complete a legal engagement shall not
constitute, in itself, evidence of misrepresentation, false promise or
dishonest conduct.
(3) Reimbursement of a legal fee may be
allowed only if:
(i) the
attorney provided no legal services to the client in the engagement;
or
(ii) the legal
services that the attorney actually provided were, in the trustees' judgment,
minimal or insignificant; or
(iii) the claim is supported by a
determination of a court, a fee conciliation bureau, or an accounting
acceptable to the trustees that establishes that the client is owed a refund of
a legal fee. No award reimbursing a legal fee shall exceed the actual fee that
the client paid the attorney.
(4) In the event that a client is
provided equivalent legal services by another attorney without cost to the
client, the legal fee paid to the predecessor attorney will not be eligible for
reimbursement, except in extraordinary circumstances.
