§ 468-B — Clients' security fund of the state of New York

§ 468-b. Clients' security fund of the state of New York. 1. The court\nof appeals shall appoint a board of trustees to administer the lawyers'\nfund for client protection of the state of New York established pursuant\nto section ninety-seven-t of the state finance law. Such board shall\nconsist of seven members. Of the trustees first appointed, three shall\nbe appointed for a term of three years; two for a term of two years; and\ntwo for a term of one year. As each such term expires, each new\nappointment shall be for a term of three years. The court of appeals may\nrequire such reports or audits of the board as it shall from time to\ntime deem to be necessary or desirable.\n 2. The board shall have the power to receive, hold, manage and\ndistribute the funds collected hereunder for the purpose of maintaining\nthe integrity and protecting the good name of the legal profession by\nreimbursing, in the discretion of the trustees to the extent they may\ndeem proper and reasonable, losses caused by the dishonest conduct of\nattorneys admitted to practice in this state. For purposes of this\nsection, the term "dishonest conduct" shall mean misappropriation or\nwilful misapplication of clients' money, securities, or other property,\nby an attorney admitted to practice in this state.\n 3. The board of trustees shall adopt regulations for the\nadministration of the lawyers' fund for client protection of the state\nof New York and the procedures for presentation, consideration,\nallowance and payment of claims, including the establishment of a\nmaximum limitation for awards to claimants.\n 4. The board of trustees shall have the sole discretion to determine\nthe merits of claims presented for reimbursement, the amount of such\nreimbursement and the terms under which such reimbursement shall be\nmade. Such terms of reimbursement shall require that the claimant\nexecute such instruments, take such action or enter into such agreements\nas the board of trustees shall require, including assignments,\nsubrogation agreements and promises to cooperate with the board of\ntrustees in making claims against the attorney whose dishonest conduct\nresulted in the claim.\n 5. The board of trustees shall serve without compensation but shall be\nentitled to receive their actual and necessary expenses incurred in the\ndischarge of their duties.\n 6. The board of trustees may employ and at pleasure remove such\npersonnel as it may deem necessary for the performance of its functions\nand fix their compensation within the amounts made available therefor.\n 7. The board of trustees shall be considered employees of the state\nfor the purpose of section seventeen of the public officers law.\n 8. All payments from the lawyers' fund for client protection of the\nstate of New York shall be made by the state comptroller upon\ncertification and authorization of the board of trustees of said fund.\n 9. Acceptance of an award of reimbursement from the lawyers' fund for\nclient protection shall, to the extent of such award, (a) subrogate the\nfund to any right or cause of action that accrued to the claimant as a\nconsequence of the dishonest conduct that resulted in the claimant's\naward and (b) create a lien in favor of the fund that shall attach to\nany money asset that is designated to be paid to the claimant from, or\non behalf of, the attorney who caused the claimant's loss. If the fund\nfully reimburses the claimant's loss, as determined by the board of\ntrustees, the lien shall be in the amount of the fund's award. If the\nclaimant's loss exceeds the fund's award, the lien shall not extend to\nthe claimant's right to recover additional restitution from the attorney\nfor the claimant's unreimbursed loss. In the event of a recovery by the\nfund, a claimant shall be entitled to any money recovered in excess of\nthe fund's award of reimbursement to the claimant.\n