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THE COURTS

Title 204—JUDICIAL SYSTEM GENERAL PROVISIONS

PART V. PROFESSIONAL ETHICS AND CONDUCT

[ 204 PA. CODE CH. 83 ]

Proposed Amendment to Rule of Disciplinary Enforcement 514

[43 Pa.B. 4967]
[Saturday, August 31, 2013]

 Notice is hereby given that the Pennsylvania Lawyers Fund for Client Security (the ''Fund'') is considering submitting proposed changes to the Supreme Court of Pennsylvania to amend the Pennsylvania Rules of Disciplinary Enforcement as set forth in Annex A. Some concern has been expressed regarding the number of claims being filed with the Fund as well as the dollar value of the alleged losses being claimed. Additionally, some concern has been expressed that certain business entities should be excluded from recovery from the Fund. Opinions have been expressed that the Fund is not intended to be an insurance program for businesses and corporations. Business entities, through their owners or board members should monitor the business' exposure to attorney malfeasance and to take appropriate steps to prevent and minimize such damages.

 Interested persons are invited to submit written comments regarding the proposed amendments to the Executive Director, Pennsylvania Lawyers Fund for Client Security, P.O. Box 62585, Harrisburg, PA 17106, by facsimile to 717-231-9511 or by email to admin@palawfund.com on or before September 24, 2013.

By Pennsylvania Lawyers

Fund for Client Security

KATHRYN J. PEIFER, Esq., 
Executive Director

Annex A

TITLE 204. JUDICIAL SYSTEM GENERAL PROVISIONS

PART V. PROFESSIONAL ETHICS AND CONDUCT

Subpart B. DISCIPLINARY ENFORCEMENT

CHAPTER 83. PENNSYLVANIA RULES OF DISCIPLINARY ENFORCEMENT

Subchapter E. PENNSYLVANIA LAWYERS FUND FOR CLIENT SECURITY

DISHONEST CONDUCT OF ATTORNEY

Rule 514. Reimbursable losses.

 (a) General rule. For the purposes of this subchapter, reimbursable losses consist of those losses of money, property or other things of value which meet all of the following requirements:

*  *  *  *  *

 (4) The loss was not incurred by:

 (i) the spouse or other close relative, partner, associate, employer or employee of the Covered Attorney, or a business entity controlled by the Covered Attorney, or any entity controlled by any of the foregoing;

 (ii) an insurer, surety or bonding agency or company, or any entity controlled by any of the foregoing;

 (iii) any government unit;

 (iv) any financial institution that may recover under a ''banker's blanket bond'' or similar commonly available insurance or surety contract; [or]

 (v) a business organization having twenty or more employees; or

(vi) an individual or business entity suffering a loss arising from personal or business investments not arising in the course of the client-attorney relationship.

 (5) In cases of extreme hardship or special and unusual circumstances, and subject to the provisions of paragraph (b), the Board may, in its discretion, and consistent with the purpose of the Fund, recognize a claim which would otherwise be excluded under this subchapter.

*  *  *  *  *

 (b) Maximum recovery. The maximum amount which may be disbursed from the Fund to any one Claimant with respect to the Dishonest Conduct of any one Covered Attorney shall be $100,000. The maximum amount which may be disbursed from the Fund as a result of any one Covered Attorney shall be $1,000,000. The Board may petition the Supreme Court of Pennsylvania to exceed the $1,000,000 maximum when the Board determines, in the exercise of its discretion, that exceeding the maximum is necessary to adequately compensate all victims of the Dishonest Conduct of the Covered Attorney and exceeding the maximum will not unduly burden the Fund.

*  *  *  *  *

[Pa.B. Doc. No. 13-1605. Filed for public inspection August 30, 2013, 9:00 a.m.]



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