Client Protection Fund Board

JoAnne Lewis Nolte, chair

The Clients’ Protection Fund was established in 1976 to make monetary awards to people who have suffered financial losses because of the dishonest conduct of Virginia lawyers. The fund is managed by a fourteen-member board appointed by the Virginia State Bar Council.  Board members investigate all petitions from clients for payments from the fund. The board hears each petition and determines the amount of loss.

As of July 1, 2013, forty claims were pending from the previous year. In FY 2014, 101 new petitions were received. The total amount paid during 2013-2014 was $353,540 representing fifty-seven claims. The board denied seventeen petitions, and twelve petitions were rejected for not meeting the CPF rule requirements. One claim was withdrawn by the petitioner.  As of June 30, 2014, there were fifty-four pending claims. The board reviewed and investigated seventy-eight claims during the year. 

The fund began the fiscal year on July 1, 2013, with a cash balance of $6,452,707. The Clients’ Protection Fund $25 assessment from all active attorneys totaled $770,275. Interest income, net of bank service charges for the fiscal year, totaled $101,932. The fund received restitutions from attorney general’s collections, debt set-off, and individual restitutions in the amount of $12,223 net of attorney’s fees for collection services. $27,000 was paid to Oliver Wyman Actuarial Consulting for an actuarial review of the fund. As of June 30, 2014, the cash balance in the fund was just over $6,956,597.

In September, the board proposed increasing the per attorney limit from 10 percent to 15 percent of the net worth of the fund, and increasing the per claim limit from $50,000 to $100,000.

At its October 4, 2013, meeting, the VSB Council voted to refer the proposed per-claim limit increase back to the board for consideration of a gradual phase-in. The council also voted to seek legislation authorizing the Supreme Court to continue the $25 CPF assessment beyond June 30, 2015, when it was scheduled to sunset. Senator Richard H. Stuart and CPF Finance Subcommittee Chair Jack Harris were instrumental in getting the assessment extended for another five years. It will now expire June 30, 2020. 

The Clients’ Protection Fund board members are to be commended for the many hours they spend investigating and deliberating claims submitted to the board. The board also spent considerable time this year working on proposed rule changes and on oversight of fund investments. Appreciation is extended to Peter M. Mellette, who is rotating off the board, for his years of service. 

The board welcomes Susan B. Tarley from the Sixth Disciplinary District as a new member for fiscal year 2014-2015.

Updated: Aug 07, 2014