Can the Client Security Fund Help You?
What is the Client Security Fund?
The fund is a public service of the legal profession in California. In 1972, the State Bar of California sponsored legislation to create the fund in order to compensate clients who lose money due to a lawyer's dishonest conduct. Every active lawyer in the state contributes to this fund.
What Kind of Losses are Covered?
Basically, the fund can reimburse you up to $50,000 for thefts by a lawyer. It covers money or property lost because a lawyer was dishonest (not because the lawyer acted incompetently or failed to take a certain action). To qualify for the fund, you must be able to show that the money or property came into the lawyer's hands.
The fund does not pay interest nor does it pay for any damage done as a result of losing your money. For example, if a lawyer takes money that should have been used to prevent a foreclosure on your house, the fund can repay you for the lost money but not the lost house.
Can I Receive My Fees Back?
The fund will reimburse fees only in limited cases. If the lawyer did no work, fees may be covered by the fund. Fees are not reimbursable simply because you are dissatisfied with the services, or because the work was not completed.
For example, if the lawyer consulted with you, and/or appeared in court on your behalf, prepared correspondence, or reviewed and filed documents for you, your fees may not be reimbursable under our rules.
Who Can Apply?
Almost anyone who has lost money due to a lawyer's dishonesty can apply for reimbursement. You do not have to be a United States citizen.
However, if you are the spouse or other close relative of the lawyer in question, or the lawyer's business partner, employer or employee, or a business controlled by the lawyer, the fund will not pay you reimbursement. Also, the fund will not reimburse for losses suffered by government entities or agencies.
Who Decides Whether an Application Will Be Paid?
The Client Security Fund Commission decides whether you qualify for reimbursement from the fund, and, if so, whether part or all of your application will be paid. The Commission is made up of seven volunteers -- four lawyers and three non-lawyers appointed by the State Bar Board of Trustees.
What Other Steps Should I Take?
Since you will need to prove that the lawyer dishonestly took your money or property, you should register a complaint against the lawyer with the Attorney Discipline System, if you have not already done so. Click for a discipline complaint form, or you may write or call toll free:
The State Bar of California-Intake Unit
1149 South Hill Street
Los Angeles, CA 90015-2299
Also, depending on the circumstances, you may be able to take the lawyer to court or make criminal charges against the lawyer. Since the law does not allow the State Bar to give you legal advice, you may want to consult a new lawyer about these matters. The filing of an application does not stop any statute of limitations from running so you should continue to explore other remedies available to you. If you do not know a lawyer who can help, call a Lawyer Referral Service in your area; the services are listed in the Yellow Pages of the telephone directory. There are deadlines for starting.
How May I Apply?
Please read the Important Information & Instructions and the Rules of Procedure, Client Security Fund Matters, then download a Client Security Fund application form. To receive an application packet by regular mail, you may write or call:
State Bar of California, Client Security Fund
1149 South Hill Street
Los Angeles, CA 90015-2299
The process is simple and free, and there is a staff to assist you. You do not need a lawyer to apply but you may hire one if you wish.
How is Your Client Security Fund Request Handled?
How is My Client Security Fund Application Processed?
In general, it takes an average of 12 months to complete the processing of an application. However, the processing time may be shorter or longer depending on three factors:
- Whether the lawyer has been disciplined.
- The availability of evidence to prove that you lost money due to a lawyer's dishonesty.
- How many applications were received ahead of yours.
Do not be discouraged by the amount of time required, or if you do not hear from us often. We will monitor your file on a regular basis to assure that your application remains on our active list. Should you change your address, please remember to notify us.
The processing of an application for reimbursement from the Client Security Fund is separate from the handling of any discipline complaint you may have made against the lawyer. The Client Security Fund Unit is responsible for handling your application for reimbursement; the Office of the Chief Trial Counsel is responsible for your discipline complaint. Sometimes we may both ask for the same information or copies of the same documents. Your patience and cooperation are appreciated.
What Happens in the Initial Review?
The Client Security Fund staff, which includes lawyers and paralegals, reviews your application and gets in touch with you if more information is needed. Keep in mind that the more information you can provide, the faster we can process the application.
Is Discipline of the Lawyer Needed?
The fund can reimburse you only if a lawyer lost your money or property through an act of theft, or an act equivalent to theft, and has been disciplined. So, unless the lawyer resigned from the bar, died, or was found guilty or liable in court on charges relating to your application, you cannot be reimbursed until the lawyer is disciplined through the Attorney Discipline System.
If the lawyer is still an active member of the State Bar, the staff will check to see if you have filed a discipline complaint against the lawyer. If you have not done so, they will send you a complaint form to complete and file.
Who Makes the Decision?
The Client Security Fund Commission, composed of seven volunteers appointed by the State Bar Board of Trustees, decides whether to pay your application, pay part of it, or to deny the application. The Commission has four lawyer members and three non-lawyer members.
The Commission reviews applications on a first-come, first-served basis. It considers your application, the other papers and information that you and the Client Security Fund staff have put together and the results of any disciplinary or other cases relating to your application. The Commission may also hold a hearing, but in most cases does not.
After its review, the Commission issues a "Tentative Decision." It tells you and the lawyer whether the Commission decided to pay the application and why.
What If I Disagree with the Decision?
If you are dissatisfied with the Tentative Decision, you can send your written objections within 30 days to the Client Security Fund.
You must send a copy of your letter to the lawyer; his/her address is listed on the last page of the Tentative Decision, called "Declaration of Service." (The lawyer also has a right to object to the decision.)
However, if you are satisfied with the Tentative Decision, you do not need to do anything. If no one objects, the decision becomes final after 30 days.
If either you or the lawyer sends objections, the Commission will review them at its next meeting and issue a "Final Decision." If you are dissatisfied with this decision, you have a right to ask your county superior court for a review. You may want a lawyer to help you with a court review. If you do not know a lawyer for this purpose, you can call a Lawyer Referral Service in your area. These services usually are listed in the Yellow Pages of the telephone directory.
How is Payment Made?
If you qualify for reimbursement from the fund, the State Bar issues a check approximately four weeks after the "Final Decision" takes effect. A check for more than $10,000 is sent by certified mail. Also, if a lawyer represented you in making the application, the check will be mailed to the lawyer, unless the lawyer tells the Client Security Fund office to send it directly to you.
If you have any questions about your application, please call or write the Client Security Fund office in Los Angeles at:
THE STATE BAR OF CALIFORNIA
The Client Security Fund
1149 S. Hill Street
Los Angeles, CA 90015-2299
For faster processing, please let us know by writing to the above address if your address and/or telephone number has changed since your application was filed. Please include your case number, if known.