Section 30. Processing petitions

A. The chair of the board shall cause each such petition to be sent to a member of the board or other member of the Virginia State Bar for investigation and report. A copy shall be served upon or sent by registered mail to the lawyer complained of at his last known address. Wherever possible, the member to whom such petition is referred shall practice in the jurisdiction wherein the attorney complained of practiced. Such member shall be reimbursed for his reasonable out-of-pocket expenses in making such investigation. From time to time, the chair may request of the petitioner further information with respect to the alleged loss.

B. A member to whom a petition is referred for investigation shall conduct such investigation as to him seems necessary and desirable in order to determine whether the same is for a reimbursable loss and in order to guide the board in determining the extent, if any, to which the loss shall be reimbursed from the fund. The District Committees of the Virginia State Bar shall allow such member to have access, during such investigation, to the files and records, if any, pertaining to the alleged loss. Any information obtained by the member from said district committee files shall be used solely by or for the Clients' Protection Fund Board, but otherwise shall constitute confidential information.

C. When, in the opinion of the member to whom the petition has been referred, the petition is clearly not for a reimbursable loss, no further investigation need by conducted, but a report with respect to such petition shall be made by the member to whom the petitioner was referred, as hereinafter specified.

D. Reports with respect to petitions shall be submitted by the members to whom they have been referred for investigation to the chair of the board. The chair shall summarize each report in such detail as to him shall seem necessary and shall send to each member of the board a copy of such summary.

E. No petition with respect to which an inadequate opportunity for investigation has been afforded need be considered by the board for reimbursement in the year in which such claim is presented.

F. In those instances where the reporting member in his report suggests or any other member of the board, after studying the summaries of petitions to be processed, requests that the board hear evidence, the board shall hear the petitioner, the attorney complained of and such other evidence as may be presented. Absent such recommendation or request, petitions may be processed on the basis of information contained therein and in the report of the member who investigated such petitions. In all cases, the attorney complained of or his personal representative will be given an opportunity to be heard by the board if he so requests. The petitioner shall be given an opportunity to be heard by the board if the attorney complained of exercises his right to be heard by the board.

G. The board shall, in its sole discretion, determine the amount of loss, if any, for which any petitioner shall be reimbursed from the fund. In making such determination, the board shall consider inter alia, the following:

1. Any conduct of the petitioner which contributed to the loss;

2. The degree of hardship suffered by the petitioner subject to the following guidelines:

(a) The claim form utilized by the board shall state that no claim will be considered unless accompanied by a current financial statement of the petitioner, and a copy of a simple financial statement form shall be made a part of the claim application; and

(b) It is presumed that hardship results when dishonest conduct, as defined in these regulations, is committed by a lawyer. Because the assets of the Clients' Protection Fund are limited, however, reimbursement of loss sustained as a result of such conduct may be denied to any petitioner who has a net worth in excess of $1,000,000 or adjusted gross income for the year preceding the claim in excess of $75,000.

3. The total amount of losses reimbursable hereunder on account of the misconduct of any one lawyer or association of lawyers (including, without limitation, a law firm, professional corporation, or an office-sharing arrangement among lawyers) shall be limited to 10% of the net worth of the Clients' Protection Fund at the time the first claim is made. In the event of multiple claims on account of the misconduct of any one lawyer or association of lawyers, claims may be considered in any order or grouping which the board, in its discretion, finds appropriate, taking into account the equities and timeliness of each claim, and no further payment shall be made in respect to misconduct of any one lawyer or association of lawyers once the 10% limit has been reached;

4. The total amount of reimbursable losses in previous years for which payment has not been made and the total assets of the fund;

5. The board may, in its sole discretion, allow further payment in any year on account of a reimbursable loss allowed by it in prior years which has not been fully paid; provided such further payment would not be inconsistent or in conflict with any previous determination with respect to such loss;

6. No payment shall be made upon any petition, a summary of which has not been submitted to the members in accordance with these rules of procedure. No payment shall be made to any petitioner unless said payment is duly approved by the board; and

7. No claim shall be considered by the board unless the same shall have been filed within three years from the date of the occurrence giving rise to the claim, or within one year of the discovery of such occurrence if discovery could not reasonably have been made within three years thereof. In no event shall a claim be allowed if made more than five years after the occurrence complained of.

H. A member who has or has had a lawyer-client relationship or financial relationship with a claimant or lawyer who is the subject of a claim shall not participate in the investigation or adjudication of a claim involving that claimant or lawyer. A member with any other past or present relationship with a claimant or the lawyer whose alleged conduct is the subject of the claim, shall disclose such relationship to the board and, if the board deems appropriate, that member shall not participate in any proceeding relating to such claim.

Historical Notes

Derived from VR167-01-201 § 3, eff. February 22, 1992; amended, eff. June 17, 1993.

Statutory Authority

§ 54.1-3910 of the Code of Virginia and Part 6, §IV, Paragraph 16 of the Rules of the Virginia Supreme Court.