SAN FRANCISCO – The California Client Security Fund, managed by the State Bar of California, provides a chance at reimbursement for those whose money is taken by a dishonest attorney.
The California State Bar website tells the story of Jewell Matthews, a pastor, who recently received $3,000 from the fund as reimbursement for the fee she and her late husband paid to California attorney Philip Kramer in 2010. The couple was struggling with mortgage payments for their Pennsylvania home when a letter from Kramer arrived, offering his services to help find a solution to their payment problem.
The couple didn’t think twice about trusting Kramer. The fact that he was an attorney, coupled with the name of the Matthews’ mortgage lender used in the document, gave it perceived legitimacy. Matthews attributed her naiveté to her trusting pastoral nature and desperation. When Kramer took their money without providing any work, the Matthews tried unsuccessfully to contact him.
The Matthews were not the only victims of Kramer’s dishonest dealings. The State Bar and the Attorney General’s office shut down his office in 2011. He was disbarred for collecting advanced fees from clients without providing representation.
The California Client Security Fund does not move quickly, but it does move, as Matthews can attest to. She is grateful to receive the money, even though it is six years after Kramer cheated her and her husband.
The fund’s director, Lori Meloch, estimated that $8 million in reimbursements will be awarded in 2016. Approximately 700-800 people are reimbursed by the fund each year. But it is a lengthy process; Meloch tells people it can take up to two years before their application is considered.
California has more than 150,000 lawyers. When someone believes they have been cheated by one of them and wants retribution, they need to start the process by filing a complaint with the State Bar. If the bar investigates accusations and finds the lawyer has taken money illegally, usually by not providing services, the complainant may be awarded restitution through the fund. There is a cap of $50,000 on payouts that occurred before Jan. 1, 2009, and a $100,000 cap on losses that occurred on or after Jan. 1, 2009.
A victim of attorney fraud must fill out an application, available on the State Bar website, to get the reimbursement ball rolling. The complaint must be due to actual loss of money, which the attorney received. It can’t be simply a matter of dissatisfaction with the attorney’s performance.
The fund was established in 1972 to protect consumers from dishonest lawyers. It covers the loss of money or property to a dishonest lawyer. It does not provide compensation due to lawyer incompetence or malpractice.
The types of dishonest actions that can qualify under the fund include theft or embezzlement; failure to refund unearned attorney fees; borrowing money from a client without the intention or ability to repay; taking a client’s money or property purportedly for use as an investment when no investment is made; and an act of dishonesty or deceit that causes a client to lose money or property.