Wisconsin Lawyer
Vol. 78, No. 9, September 2005

Righting the Wrongs

by
State Bar executive director

The other day, six lawyers met as a committee at the State Bar Center. Two public members of the committee, one the special assistant to the president of a Wisconsin college and the other a small business owner, and several State Bar staff joined them. Each person brought with them three, 3-inch-thick binders of materials that had been provided in advance of the meeting.

It was another triannual meeting of the Wisconsin Lawyers' Fund for Client Protection Committee. The committee was going to spend the day reviewing, debating, and making decisions about the 80 applications for funds received in the previous four months. At 80, the number of applications is among the highest number of applications ever received. And, as is typical, most of these applications were generated by the clients of just one lawyer. At the end of the day, the committee approved 67 claims for a total of $275,721.30. Fifty of the approved claims were against just one attorney, and the committee believes that not all potential claims against him have been submitted. The committee deferred two claims and denied 11.

The Client Protection Fund was created by supreme court rule (SCR 12.04) in 1981 to reimburse clients for money lost due to lawyer theft in a lawyer-client relationship. Every year, all active lawyers pay into the fund an assessment that is set by the committee, but with an assessment cap set by the supreme court. The current cap is $25, though the committee has yet to set the assessment that high. Whenever the value of the fund meets or exceeds $250,000, the committee files a certificate of sufficiency with the supreme court and no assessment is collected the following year. The committee was able to file such a statement and lawyers did not have to pay into the fund for 2004, but this recent claims experience means that the fund has fallen far below that limit.

Since the fund was created, more than $3 million has been paid out resulting from 497 claims against 118 attorneys. Of those 118 attorneys, most have only one or two claims made against the fund because of their actions. The highest number of claims paid because of one attorney was 78, for a total of $37,791.50. However, the highest dollar amount paid out of the fund because of one attorney was $318,686.57 for just seven claims. Both of these experiences occurred in the last five years.

Not all claims are paid and not all claims are paid in the amount sought by the claimant. According to committee chair David Reddy, some claims are really fee disputes, and the committee pays claims only for dishonest conduct. In recent years, the committee has increased its ongoing efforts to keep the annual assessment as low as possible by making it easier for the fund to require restitution payments from the attorneys who have caused the claims.

While many professions say they protect the public, the Client Protection Fund is tangible proof that lawyers go far beyond other professions to right the wrongs caused by their own colleagues.

Wisconsin Lawyer