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THE COURTS

PART V. PROFESSIONAL ETHICS AND CONDUCT

[ 204 PA. CODE CH. 83 ]

Amendment of Rules 514(a) and 514(b) of the Pennsylvania Rules of Disciplinary Enforcement; No. 123 Disciplinary Rules Doc.

[44 Pa.B. 768]
[Saturday, February 8, 2014]

Order

Per Curiam

And Now, this 24th day of January, 2014, upon submission by the Board of the Pennsylvania Lawyers Fund for Client Security; the proposal having been published for public comment at 43 Pa.B. 4967 (August 31, 2013):

It Is Ordered pursuant to Article V, Section 10 of the Constitution of Pennsylvania that Rules 514(a) and 514(b) of the Pennsylvania Rules of Disciplinary Enforcement are amended in the following form.

 This Order shall be processed in accordance with Pa.R.J.A. No. 103(b), and shall be effective in 30 days for claims currently pending with the Pennsylvania Lawyers Fund for Client Security, claims filed with the Pennsylvania Lawyers Fund for Client Security on or after the above date and, awards approved by the Board of the Pennsylvania Lawyers Fund for Client Security after the effective date of this Order.

 Mr. Chief Justice Castille files a dissenting statement.

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

[(v)] (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 request 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.

*  *  *  *  *

Dissenting Statement
Mr. Chief Justice Castille

 I respectfully dissent in part, only insofar as the amendment to Pa.R.D.E. 514(a)(4)(v) excludes from the scope of entities that may assert a reimbursable loss ''a business organization having twenty or more employees.'' In my view, the purpose of the Fund does not include reimbursing large entities which are sufficiently positioned to insure against losses. I would prefer an amendment that applied to ''a business organization having five or more employees.''

[Pa.B. Doc. No. 14-270. Filed for public inspection February 7, 2014, 9:00 a.m.]



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