Client Protection Fund
The Fund's Mission
The Client Protection Fund ("CPF") was established by the
Supreme Court of Arizona in 1961. Its purpose is to promote public
confidence in the administration of justice, and to preserve the
integrity of the legal profession by reimbursing people who have
sustained losses caused by the dishonest conduct of lawyers
admitted and licensed to practice in Arizona.
What is the Client Protection Fund and how is it
funded?
The Client Protection Fund is a trust that exists as a separate
entity from the State Bar of Arizona. The CPF Board of Trustees
receives, holds, manages, and disburses money from the Fund. The
Fund is a charitable organization and is not funded by taxpayer
dollars. Each lawyer licensed to practice law in Arizona
contributes a yearly assessment to the Fund. That money is
invested, which allows the Fund to pay more claims. The Trustees
can pay up to $100,000 to one claimant, and up to $250,000 in
claims against one lawyer.
Who administers the Fund?
The Fund is administered by the Client Protection Fund Board of
Trustees. There are five Trustees-four lawyers and one
layperson-who are appointed by the State Bar of Arizona Board of
Governors. The Trustees are volunteers who serve without
compensation. The Trustees may serve two five-year
terms. However, non-lawyer Trustees may serve no more than
one five-year term. All lawyer Trustees must have practiced
law in Arizona for at least ten years. In addition, staff
from the State Bar of Arizona assist the Trustees in the
administration of claims.
The Trustees evaluate claims, determine if they are eligible for
payment, and compensate eligible claimants. The Trustees
invest Fund money in accordance with the Board's investment
policies. Each year an annual report is prepared and
presented to the Supreme Court of Arizona and to the Board of
Governors. This report is also available for viewing by the
public on the State Bar Web site.
Who is eligible to receive money from the
Fund?
- People who have had a lawyer-client relationship with a
lawyer
- People who have had a fiduciary relationship with a lawyer that
is customary and related to the practice of law, such as an
administrator, personal representative, executor, trustee,
guardian, or conservator
Who is not eligible to receive money from the
Fund?
- The present or former spouse of the lawyer
- The child, parent, grandchild, grandparent, or sibling of the
lawyer, whether by blood or marriage
- Partners, associates, co-shareholders, or employees of the
lawyer
- Any surety or bonding agency
- Any business entity controlled by the lawyer
- Any governmental entity or agency
- Medical providers or other third parties with claims against
the lawyer
- Any business entity, unless the Trustees invoke their sole and
absolute discretion. The Trustees may approve payment of a
claim that has been filed by a small, family-owned and operated
business.
- Large companies and corporations are not considered eligible
claimants.
What types of losses are compensable?
Losses caused by the "dishonest conduct" of the lawyer, which
include:
- Wrongful acts in the nature of theft or embezzlement of
money
- The wrongful taking or conversion of money, property or other
things of value
- Refusal to refund unearned fees received in advance where the
lawyer performed no services or such an insignificant portion of
the services that the refusal to refund the unearned fees
constitutes a wrongful taking or conversion of money
- A lawyer's act of intentional dishonest or deceitful conduct
that proximately leads to the loss of money or property
What types of losses are not compensable?
- Claims based upon negligence, incompetence, or malpractice by a
lawyer
- Claims based upon disputes as to attorney's fees charged when
the lawyer performed more than an insignificant amount of work
- Money lost by a claimant that was given to a lawyer for
investment or any other purpose that did not arise from the
lawyer-client relationship
- Claims requesting compensation for interest, legal fees paid to
other lawyers, damages, or other expenses
- Claims where the lawyer was not a member in good standing with
the State Bar at the time of the dishonest conduct, i.e.,
the lawyer had been disciplined for more than six months.
Is there a time limit for filing a claim?
There is a five-year statute of limitations, which means that a
claimant must file the claim no more than five years from the time
the claimant knew, or should have known, of the dishonest conduct.
The Trustees, in their sole discretion, may consider claims filed
after the statute of limitations as having expired.
What happens after I file my claim?
The CPF Administrator will review your claim. If
additional information is needed, he or she will write to you
asking for specific information. When all of the necessary
documentation is submitted, the Administrator will determine
whether or not the claim is eligible for consideration, using the
criteria listed under the previous topics.
- If the CPF Administrator determines that the claim is not
eligible for consideration, the claimant will receive a Notice of
Insufficiency advising the claimant why the claim does not meet the
standards for consideration. The claimant is given 30 days to
request reconsideration of the Notice of Insufficiency. If
the claimant submits a Request for Reconsideration, it will be
forwarded to the Board of Trustees for consideration at its next
meeting. If the Board denies the claim at the meeting, the
claimant will be notified in writing. There is no further
appeal process.
- If the CPF Administrator determines that the claim is eligible
for consideration, the claim will be deemed materially complete and
will be sent to the Board of Trustees. A copy of the Claim
for Relief, and a Notice of Claim will be sent to the lawyer, who
is allowed 30 days to respond. If a response is received, it
will be sent to the Trustees and to the claimant. The claim
will then be placed on the agenda for the next meeting.
- If the Trustees vote to pay a claim and the lawyer has been in
one of the following categories for a period of six months, a check
will be issued and sent to the claimant. The lawyer must have been:
(1) deceased, (2) disbarred, (3) transferred to disability inactive
status, (4) suspended by the Supreme Court, (5) placed on interim
suspension, or (6) convicted of a felony arising out of the facts
that gave rise to the claim. If a claim has been approved, but is
not yet ripe for payment, the claim will be held until such time as
one of the triggering events listed above occurs.
- If the Trustees deny the claim, the claimant will be notified
why the claim was denied and afforded an opportunity to request
reconsideration. The Request for Reconsideration will be sent
to the Trustees for evaluation and they will make their final
decision at the next regularly scheduled meeting. The
claimant will then be notified, in writing, as to whether or not
the Trustees have approved or denied the claim.
How long will it take to process my
claim?
The processing of a claim may take six months to a year due to
the eligibility requirement, and depending upon the lawyer's
status.
May I file charges with any other
entities?
- The Client Protection Fund is separate from the State Bar of
Arizona. Claimants should call the Attorney Consumer
Assistance Program ("A/CAP") at 602.340.7280 to obtain more
information regarding filing disciplinary complaints against
lawyers.
- Persons involved in a fee dispute with a lawyer may contact the
Fee Arbitration Program at 602.340.7379
- Claimants may also contact the Attorney General's Office at
602.542.5025 in Phoenix, or 520.628.6504 in Tucson.
- Claimants may have other options, and may wish to consult with
a lawyer to determine what course of action to take.
For more information about the Client Protection Fund,
please contact:
Karen Weigand, Client Protection Fund
Administrator
karen.weigand@staff.azbar.org
602.340.7286
Toll-free 866.482.9227
The Client Protection Fund Claim for Relief and Declaration of
Trust are also available for download at: /cpf.