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  • InsideTrack
  • August 03, 2022

    Client Protection Fund: More than $130k Reimbursed to Clients in FY 21-22

    The Wisconsin Lawyers' Fund for Client Protection Committee reimbursed more than $130K to nine victims of lawyer theft over the past year.

    Shannon Green

    financial protection

    Aug. 3, 2022 – The Wisconsin Lawyers' Fund for Client Protection is an important and vital way to restore faith in the legal system for clients who are victims of lawyer theft and misconduct.

    “When a client suffers financial loss due to lawyer misconduct, the Wisconsin Lawyers’ Fund for Client Protection is available as a resource to reimburse the financial loss and to restore trust in the legal profession,” says Sheri Walz, chair of the Wisconsin Lawyers’ Fund for Client Protection Committee.

    The committee’s task is to pay back funds taken dishonestly from clients by their lawyer. Over the past fiscal year (2021-22), the committee paid $130,331.25 to nine clients, victims of ​eight Wisconsin lawyers due to unearned advanced fees and dishonest conduct.

    “The ability to make whole a person or entity who suffered loss because of the bad acts of one of our number is a great demonstration of how ours is a profession and not just a job,” said Lindsey Draper, committee member.

    It takes time for a claim to be reimbursed. Over the past year, the committee received 23 new claims involving 17 attorneys.

    Serving the Bar and their Clients

    Many of the reimbursements the committee makes involve lawyers who report to the Office of Lawyer Regulation (OLR) that they had health issues, addiction or mental health issues, or are solo/small firm attorneys who seem to have become overwhelmed by their work.

    Shannon Green Shannon Green is communications writer for the State Bar of Wisconsin, Madison. She can be reached by email or by phone at (608) 250-6135.

    “If a lawyer realizes they are in trouble, they should ask for help right away,” Walz said. “The State Bar has a number of very helpful resources,” including the Wisconsin Lawyer Assistance Program (WisLAP) – which offers free confidential assistance – as well as Practice411 for practice management help, and the Solo/Small Firm & General Practice Section and other substantive practice sections and their elists.

    “Other members of the firm or close colleagues that the lawyer is already comfortable consulting with may serve as resources as well,” Draper said.

    There’s another growing source for claims – those resulting from the death or disability of a lawyer. “Disability and death of an attorney has led to an increasing number of claims from 2021 to 2022. As a result, the committee is undertaking a review of its unearned fees policy as it relates to deceased or disabled attorneys,” Walz said.

    Compensating Victims of Lawyer Misconduct

    Since 1981, more than $6.5 million has been returned to more than 1,021 victims of lawyer misconduct in Wisconsin.

    Each claim is individually investigated, and reimbursement decisions are made at the discretion of the committee, which meets three times a year. Some of the money is returned to the fund via court-ordered restitution or voluntary payments from the lawyers who have approved claims against them.

    The Wisconsin Lawyers' Fund for Client Protection, created by the Wisconsin Supreme Court in 1981, reimburses clients who incur financial losses from the dishonest conduct of their attorneys.

    “Because we are a self-regulating profession, we have a responsibility to those who rely on our inclusion of certain members to basically not suffer for having trusted us,” Draper said.

    According to the ABA's most recent report, nationally on average, $45.2 million was received by funds across the U.S and $41.4 million was disbursed ($33.5 million in awards and $7.9 million in administrative costs) from 2017 to 2019.

    Wisconsin lawyers share in the efforts to make victims whole: the fee of $25 is assessed by the Wisconsin Supreme Court and collected by the State Bar of Wisconsin with annual dues statements. The amount of the assessments is determined by the committee each year by Supreme Court Rule.

    “The $25 annual assessment returns resources to the clients, allowing them to protect their rights in ongoing civil and criminal matters, and to continue to pursue their legal claim. Like every other Wisconsin attorney, each year I pay my Supreme Court Assessments, including $25 for the Fund for Client Protection,” Walz said. “Serving on the committee brings that assessment to life. I am able to see the cumulative impact of the assessment each time the committee reviews a claim, and the fund is able to provide assistance.”

    The Details: Claims for 2021-22

    Between July 1, 2021, and July 1, 2022, the Wisconsin Lawyers’ Fund for Client Protection Committee considered 23 new claims involving 17 attorneys. During the fiscal year, the committee approved nine claims – with 1 filed in previous years – reimbursing a total of $130,331.25.

    The nine approved claims were reimbursements for unearned advanced fees and dishonest conduct against eight attorneys. Claims were approved for clients of:

    • Christopher Petros: 1 claim for $5,000 for dishonest conduct;

    • Christopher Mutschler: 1 claim for $2,500; dishonest conduct;

    • Craig Knapp: 1 claim for $33,444.50; dishonest conduct;

    • Terry Constant: 1 claim for $47,557.30; dishonest conduct;

    • Randall Doyle: 2 claims totaling $2,079.45; unearned advance fees;

    • William Pangman: 1 claim for $22,500; unearned advance fees;

    • Patrick C Brennan: 1 claim for $7,500; unearned advance fees; and

    • James Runyon: 1 claim for $10,000; dishonest conduct.

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