SCR 3.820 Client's Security Fund
Baldwin's Kentucky Revised Statutes AnnotatedRules of the Supreme CourtEffective: March 1, 2020
Effective: March 1, 2020
Rules of the Supreme Court (SCR), Rule 3.820
SCR 3.820 Client's Security Fund
There shall be maintained a special fund for the purpose of providing indemnification to clients who may suffer pecuniary loss by reason of fraudulent or dishonest acts on the part of a member of the Kentucky Bar Association. The fund shall be named, held, administered and disbursed in accordance with the provisions hereinafter set forth.
(a) The purpose of the Clients' Security Fund is to promote public confidence in the administration of justice and the integrity of the legal profession by reimbursing losses caused by the dishonest conduct of lawyers admitted and licensed to practice law in the courts of this State occurring in the course or arising out of a lawyer-client relationship between the lawyer and the claimant.
(b) Every lawyer has an obligation to the public to participate in the collective effort of the bar to reimburse persons who have lost money or property as a result of the dishonest conduct of another lawyer. Contribution to the Clients' Security Fund is an acceptable method of meeting this obligation.
(c) A lawyer whose dishonest conduct has resulted in reimbursement to a claimant shall make restitution to the Fund including interest and the expense incurred by the Fund in processing the claim. A lawyer's failure to make satisfactory arrangements for restitution shall be cause for suspension, disbarment, or denial of an application for reinstatement.
All monies or other assets of the Fund shall constitute a trust and shall be held in the name of the Fund, subject to the direction of the Trustees.
Subsequent appointments shall be for a term of three years. The Board of Governors may limit the number of successive terms that Trustees may serve.
The Trustees shall have the following duties and responsibilities:
(b) A Trustee with a past or present relationship, other than as provided in section (a), with a claimant or the lawyer whose alleged conduct is the subject of the claim, shall disclose such relationship to the panel and, if the panel deems appropriate, that Trustee shall not participate in any proceeding relating to such claim.
The Trustees, employees and agents of the panel shall be absolutely immune from civil liability for all acts in the course of their official duties. Absolute immunity shall also extend to claimants and lawyers who assist claimants for all communications to the Fund.
(13) the circumstances under which the claimant has been or will be, reimbursed for any part of the claim (including the amount received, or to be received, and the source); along with a statement that the claimant agrees to notify the Board of any reimbursements the claimant receives during the pendency of the claim;
(a) Whenever it appears that a claim is not eligible for reimbursement pursuant to SCR 3.820 (10), the claimant shall be advised of the reasons why the claim may not be eligible for reimbursement, and that unless additional facts to support eligibility are submitted to the Fund, the claim file shall be closed.
(c) The lawyer disciplinary agency shall be promptly notified of the claim and requested to furnish a report of its investigation on the matter to the Trustees. The lawyer disciplinary agency shall allow the Fund's representative access to its records during an investigation of a claim. The Trustees shall evaluate whether the investigation is complete and determine whether the Trustees should conduct additional investigation or await the pendency of any disciplinary investigation or proceeding involving the same act or conduct that is alleged in the claim.
(h) When the record is complete, the claim shall be determined on the basis of all available evidence, and notice shall be given to the claimant and the lawyer of the Board's determination and the reasons therefor. The approval or denial of a claim shall require the affirmative votes of at least three trustees.
(i) Any proceeding upon a claim need not be conducted according to technical rules relating to evidence, procedure and witnesses. Any relevant evidence shall be admitted if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence over objection in court proceedings. The claimant shall have the duty to supply relevant evidence to support the claim.
(l) The claimant or respondent lawyer may request reconsideration within 30 days of the denial or determination of the amount of a claim. The request shall plainly state the reasons for such reconsideration. The Trustees shall grant or deny this request within 30 days after the request is filed with the KBA administrator. If the claimant fails to make a request or the request is denied, the decision of the Board is final.
(b) Claimants shall be reimbursed for losses in amounts to be determined by the Trustees. No claim shall be paid for consequential damages flowing from the wrongful act of a practicing attorney. Claims shall be limited to actual pecuniary amounts retained, embezzled, stolen, or otherwise taken from or withheld from the claimant by the practicing attorney.
No person shall have the legal right to reimbursement from the Fund whether as claimant, third-party beneficiary, or otherwise.
(b) As a condition of reimbursement, a claimant shall be required to provide the Fund with a pro tanto transfer of the claimant's rights against the lawyer, the lawyer's legal representative, estate or assigns; and of the claimant's rights against any third party or entity who may be liable for the claimant's loss.
(a) Claims, proceedings and reports involving claims for reimbursement are confidential until the Trustees authorize reimbursement to the claimant, except as provided below. After payment of the reimbursement, the Trustees may publicize the nature of the claim, the amount of reimbursement, and the name of the lawyer. The name and the address of the claimant shall not be publicized by the Trustees unless specific permission has been granted by the claimant.
HISTORY: Amended by Order 2020-03, eff. 3-1-20; prior amendments eff. 1-1-18 (Order 2017-18), 2-1-08 (Order 2007-70), 11-1-95 (Order 95-1), 8-1-92, 1-1-89, 1-1-88; adopted eff. 7-1-84
Note: Former Rules of Appellate Procedure (RAP) were amended and redesignated as Rules of the Supreme Court (SCR) by Order of the Supreme Court effective January 1, 1978. Prior Rules of the Court of Appeals (RCA) had been redesignated as Rules of Appellate Procedure effective March 12, 1976.
Sup. Ct. Rules, Rule 3.820, KY ST S CT Rule 3.820
Current with amendments received through June 1, 2023. Some sections may be more current, see credits for details.
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