Lawyer's Fund and Legal Malpractice
Cases in which attorneys steal money rather than lose money [or commit blunders which lose otherwise meritorious cases] are in the jurisdiction of the New York Lawyers' Fund for Client Protection. This fund fills an important role, and covers areas which will not be susceptible to a legal malpractice case. Malpractice Insurance carriers will not likely cover thefts, nor fraud by the attorneys; hence the added importance of this Fund.
The fund is paid for by attorney fees levied by New York. Attorneys now pay $ 350. per two year period merely to register. A significant portion of these monies goes to the fund. Claims have picked up recently, probably consistent with the economy, as Joel Stashenko of the NYLJ reports:
"In the first six months of this year, 349 new claims were filed with the fund, a 44.2 percent increase from the 249 received in the same period last year.
As of July 1 of this year, 762 claims were pending. If all were paid out at the maximum eligible reimbursement rate of $300,000, the fund would be liable for $35 million.
By comparison, the fund faced 612 claims on the same date last year with a potential exposure of $24 million. Halfway through 2008 the fund had 536 pending claims.
Awards also are running ahead of last year's rates. In the first six months of the year, the fund paid out $4.3 million, up $2.9 million in the same period of 2009."