Attorneys' Fund for Client Protection
The Colorado Attorneys' Fund for Client Protection is a fund established by the Colorado Supreme Court to reimburse clients who suffer a loss of money or other property from the dishonest conduct of their attorney. The fund is a remedy of last resort for clients who cannot be repaid from other sources, such as from insurance or from the attorney involved. Claimants are expected to make reasonable efforts to collect from these other sources first.
If you believe you have lost money or property as a result of the dishonest conduct of your attorney, you should start by filing a disciplinary complaint against the attorney with the Office of Attorney Regulation Counsel.
Why was the Colorado Attorneys' Fund for Client Protection established?
The legal profession depends on the trust of clients. In a very small number of cases where attorneys betray that trust and improperly handle client funds or property, it is important that the legal profession's reputation for honesty be maintained and protected by helping injured clients recover their losses.
How is the Fund financed?
The Fund is financed by annual assessments of active Colorado attorneys. None of the money in the Fund comes from clients' fees. No tax dollars are used. The voluntary nature of the Fund demonstrates the genuine desire of the Colorado legal professional to compensate clients for the dishonest actions of a few of its members.
How does the Board make decisions?
The Colorado Supreme Court has adopted written rules for the Board. Additionally, the Board has also adopted its own guidelines to publicize its internal procedures. The Board must follow these rules and guidelines in its procedures and decisions. The Board is allowed substantial discretion in deciding what claims to pay and deny, and the amount of payment. You may view the Board's Rules by reviewing Colorado Rule of Civil Procedure 252.
What kinds of losses are covered?
The Colorado Attorneys' Fund for Client Protection covers losses caused by the dishonest conduct of an attorney who is licensed to practice law by the Colorado Supreme Court. The attorney must have served the client as an attorney or in a court-appointed fiduciary relationship.
Who is a proper claimant?
In order to be a proper claimant, a person must prove the existence of an attorney/client relationship or a fiduciary relationship with an attorney.
How are claims filed?
If you think you have lost money or other property due to the dishonest conduct of your attorney, you should start by filing a disciplinary complaint with the Office of Attorney Regulation Counsel.
After you file a disciplinary complaint, you can request claim forms in writing or by telephone. Staff personnel screen each claim. If the claim does not appear to be within the jurisdiction of the Fund, that is explained to the person requesting the form. However, no one is refused a claim form. The completed claim form must be signed by the claimant, and the claimant's signature must be notarized. There is no filing fee.
What kinds of claims are compensable?
Claimants must show that the attorney received funds and misappropriated them. There are also instances where an attorney takes and keeps a retainer despite knowing that services cannot, or will not, be performed. Claims involving misappropriation of funds for the purpose of making an investment on behalf of the client may be compensable in limited instances. The fund does not pay interest on claims.
What is "dishonest" conduct?
"Dishonest" conduct includes theft or embezzlement of money or conversion of money, property or other things of value, refusal to refund unearned fees and costs deposits, or borrowing money from a client without intention or ability to repay it.
What proof of dishonest conduct is necessary?
A claimant must prove:
- receipt by the attorney of money or property belonging to the claimant;
- conversion of the funds by the attorney; and
- a definite loss resulting from this dishonest conduct.
It is necessary to submit specific proof of payment of funds to an attorney, such as copies of front and reverse sides of checks, supporting documents such as escrow agreements, settlement statements or retainer agreements. Although the staff will assist in identifying proof, the primary burden is on the claimant to demonstrate the compensability of a claim. The Fund has subpoena power for use when necessary.
The attorney will receive a copy of each claim including documentation provided together with an invitation to reply.
What happens when a claim Is filed?
Each claim is initially reviewed by the Office of Attorney Regulation Counsel to determine eligibility for payment. All claims will then be reviewed by the Board of Trustees to determine the merits of all claims, and the amount of any reimbursement.
How long will the claim process take?
Typically the Fund will make disbursements four times per year. In other words, the investigation and analysis of the claim may take as long as three months, and can often take longer due to the Office of Attorney Regulation Counsel's case load. If you have filed a request for a disciplinary investigation of your attorney, the disciplinary matter must be completed before the Fund considers your claim for reimbursement. It is important that you keep the Office of Attorney Regulation Counsel informed of your current mailing address and telephone number.
What are the limits on the payment of claims?
At the present time there is a limit of $50,000 per claim and an aggregate maximum limit of $100,000 for all claims against a single attorney. You must file a claim within three years of the date you knew or should have known about the dishonest conduct of your attorney.
Does the Fund seek to recover payments made?
Yes. The Fund takes an assignment of the claimant's rights against attorneys and others who may be liable. It is the Trustees' policy to obtain judgment against all dishonest attorneys. The Fund vigorously pursues collateral sources where appropriate.
What are collateral sources?
Collateral sources are third parties who may be liable by virtue of the nature of the misappropriation. Examples of collateral sources are fidelity bonds, title insurance, partners of the dishonest attorney and his or her malpractice carrier, and banks and insurance companies involved in forged indorsement cases.
2016 CPF Annual Report
Attorneys' Fund for Client Protection Board Members
Guidelines for Claims