Lawyers' Fund for Client Protection

What is the Lawyers' Fund for Client Protection?

The State Bar of Montana established the fund in 1976 to make monetary awards to clients in those cases in which a lawyer betrays a client's trust, misappropriating the client's funds.

Why was it created?

Montana lawyers believe that the public has a right to hold the legal profession accountable for the actions of its individual members. The Bar established, and now assures, funding for the Lawyers' Fund for Client Protection in order to help reimburse those clients who have sustained a monetary loss as the result of a dishonest act of a Bar member. On the rare occasions when a lawyer misappropriates or mishandles client funds, the Lawyers' Fund for Client Protection steps in to honor the debt through whole or partial reimbursement.

How is it funded?

The State Bar finances the Lawyers' Fund for Client Protection through an annual assessment of the active lawyers licensed to practice in Montana. The voluntary nature of the Fund demonstrates the genuine desire of the Bar to compensate clients for the dishonest actions of a few of its members.

Who is eligible to receive funds?

An application to receive Lawyers' Fund for Client Protection reimbursement may be filed by any person who has lost money because of the dishonest conduct or mishandling of funds by a Montana lawyer provided that (1) the accused attorney has died, been judged mentally incompetent, found guilty of a crime arising out of the dishonest conduct, relinquished practice, or has been disbarred or suspended; (2) the dishonest act occurred within an attorney-client relationship; (3) the alleged act was the mishandling or embezzling of funds, not malpractice or negligence; and (4) the claimant has made a reasonable attempt to recover from the lawyer within a reasonable amount of time.

Funds do not cover losses resulting from an attorney's negligence. Also, losses resulting from situations in which the attorney and client have entered into a personal business relationship outside the attorney-client relationship are not reimbursable from the Fund. Such matters may be reported by filing a complaint with the Office of Disciplinary Counsel for disciplinary action or may be the subject of malpractice suits. Information and complaint forms are available by calling the ODC at (866-288-9528) or on the web at http://www.courts.mt.gov/library/topics/attycomp.asp

How do I file a claim?

The Application for Relief and Rules are available below, or you may request them from the State Bar by calling Marie Connolly at (406) 447-2204 or via e-mail at mconnolly at montanabar dot org. Fill out the form as completely as possible and return it as directed. You should keep a copy of the completed form for your records. If you attach evidence or documents to the form when you send it, be sure to keep copies for your file.

It is not necessary to retain a lawyer to submit a claim or to represent you. If a lawyer is retained, it is the policy of the Lawyers' Fund for Client Protection that no fee or other compensation be paid by the Lawyers' Fund for Client Protection to an attorney who assists in the preparation of a claim.

What happens after I file my claim?

The Lawyers' Fund for Client Protection Board will investigate each case and claim filed. A Board representative may contact the claimant for further information and will attempt to contact the lawyer named in the complaint. If the claim as submitted is complete and found to be eligible under the rules listed above, it will be presented to the Board for final consideration and decision. In determining the amount of reimbursement allowable, various factors are considered, including the amount in the Fund at the time the claim is made. Some claims may be very large and if full reimbursement were made to the client, no one else would receive funds. By limiting the dollar amount of reimbursement provided to some individuals, the funds will not be exhausted in a short period of time. Instead, partial awards can be given to more individuals.

Payment for the Lawyers' Fund for Client Protection is not automatic. After reviewing a claim, the Board may decide against reimbursement. In that case, a written explanation is issued.

In some instances, consideration of a claim may be delayed pending pursuit by the claimant of other possible sources of recovery (e.g. forgery claims, estate proceedings) or other possible disciplinary proceedings against a lawyer. Completion of the disciplinary action can often be very helpful to the final decision on a claim.

Where can I get more information?

For specific information about the Lawyers' Fund for Client Protection in Montana, or to file a claim, please contact the State Bar of Montana at (406) 447-2204.

The Rules that govern the Lawyers' Fund for Client Protection.

Application for Relief