Lawyers' Fund for Client Protection

Collateral sources are third parties liable by virtue of their relationship to the respondent or the nature of the misappropriation. Examples of collateral sources are fidelity bonds, title insurance, partners of a defalcating attorney and their malpractice carrier, and banks and insurance companies involved in forged endorsement cases.

Claimants must show dishonest conduct: that the respondent attorney received money which was stolen in the course of an attorney/client relationship. There are also instances where an attorney takes and keeps a retainer despite knowing that services cannot, or will not, be performed.

Yes. Many claimants are assisted in their claim by New Jersey lawyers. Such representation is without charge under Rule 1:28-3(f). Also, the good work of prosecutors and those who work in discipline gives the Fund jurisdiction over matters and develops information helpful to a just resolution of claims.

A claimant must prove:

1. receipt by the respondent attorney of money or property belonging to the claimant;
2. conversion of the money by the respondent; and
3. a definite loss resulting from this dishonest conduct.

It is necessary to submit specific proof of payment to an attorney, such as copies of front and reverse sides of checks, supporting documents such as escrow agreements, settlement statements or retainer agreements. Although the Fund staff will assist in identifying proofs, the primary burden is on the claimant to demonstrate the compensability of a claim. The Fund has subpoena power for use when necessary.

Respondents receive a copy of each claim including documentation provided, with an invitation to reply with proofs of their own.

In order to be a proper claimant, a person must prove a theft of trust money as a result of an attorney/client relationship or fiduciary relationship with the respondent attorney.

Claims involving fee disputes, unfortunate or ill-advised investments placed through attorneys, and professional negligence or malpractice are not compensable. The Fund does not pay consequential damages or interest on claims.

New Jersey's judges and lawyers, as well as pro hac vice attorneys, multijurisdictional attorneys, in-house counsel, and foreign legal consultants, pay for the Fund. Each of these has an annual obligation to fulfill. That obligation is to:

1. maintain a current address with the Fund;
2. complete and return the original annual billing form; and,
3. pay the prescribed fee or, if qualified, request an exemption under Rule 1:28-2.

A portion of the annual assessment paid to the Lawyers’ Fund by judges and by those New Jersey attorneys who hold plenary licenses is based on the calendar year of admission. For the first and second calendar years of admission, there is no fee. The fee is $25 for the third and fourth years, and $46 for the fifth through forty-ninth years. Lawyers admitted fifty years or more are exempt from the fee. The amount of the fee for pro hac vice attorneys, multijurisdictional attorneys, in-house counsel, and foreign legal consultants is the same as the fee for attorneys in the fifth through forty-ninth years. These fees provide the resources necessary to operate the Fund and pay claims. The monies collected are invested in interest-bearing accounts and government backed securities to provide additional revenue. The Fund also seeks to recover money paid on claims, as described below.

There is another, larger, component of the annual assessment collected by the Fund which pays for the disciplinary system and a smaller portion that supports the Lawyers Assistance Program and the Board of Bar Examiners. New Jersey attorneys begin paying this component in the second calendar year of admission. There is no delay in payments for pro hac vice attorneys, multijurisdictional attorneys, in-house counsel, and foreign legal consultants.

Instructions for petitioning the Supreme Court are available from the Board of Bar Examiners. 

The Fund staff reviews all claims and prepares a substantive Agenda for the Board of Trustees to consider. The Trustees meet monthly to determine policy and decide claims. In some instances, a hearing is held to take testimony from the claimant, the respondent, and any other persons with knowledge of the transaction. Other claims are decided by the Trustees as administrative determinations based on the written proofs submitted. The Board of Trustees, in its sole discretion, decides all claims under Rule 1:28-3, including the amount, timing and conditions of payment for those approved.

The Fund is administered by a volunteer Board of Trustees composed of five lawyers and two non-lawyers appointed by the Supreme Court to serve staggered five year terms without compensation. The Board of Trustees employs full-time staff at the Hughes Justice Complex in Trenton to handle the day-to-day operations.

Yes. The Fund takes an assignment of the claimants' rights against respondents and others who may be liable. It is the Trustees' policy to obtain judgment against all defalcating attorneys. The Fund vigorously pursues recovery from respondents, and from collateral sources where appropriate. Collateral sources are third parties liable by virtue of their relationship to the respondent or the nature of the misappropriation. Examples of collateral sources are fidelity bonds, title insurance, partners of a defalcating attorney and their malpractice carrier, and banks and insurance companies involved in forged endorsement cases.

Claim forms can be obtained on-line: Statement of Claim form with Supplemental Statement, or by calling us toll-free: 855-533-3863 , Option 2. Additionally, you may request a form in writing. Please send a written request to;

Staff personnel screen each request. If the claim does not appear to be within the jurisdiction of the Fund, that is explained to the person requesting the form. The completed claim form must be submitted with an original signature by the Claimant. The original executed claim form with proofs attached is filed with the Fund, along with two copies. There is no filing fee. The facts disclosed in the claim must be provided to the appropriate county prosecutor and to Jason Saunders, Court Executive 3a

At the present time there is a limit of $400,000 per claimant for claims arising after January 1, 2007 and an aggregate maximum for claims against a single attorney of $1,500,000. Lower per claimant maximums apply to claims arising prior to January 1, 2007. If the compensable claims exceed the aggregate maximum, the Trustees may petition the Supreme Court for an increase as to that attorney. It may be necessary to categorize the claimants according to hardship in order to determine payment, or to delay payment until the extent of the aggregate maximum problem can be determined.

Under Rule 1:28 the Board of Trustees can only consider claims against an attorney who has been disciplined (suspended, disbarred, or disability inactive), or who is deceased. A claim can be filed with the Fund within one year of the date of first discipline or death. For good cause, the Trustees may, in their discretion, allow a claim to be filed out of time.