About the Lawyers’ Fund
The Hawai`i Lawyers’ Fund for Client Protection was established by the Supreme Court in 1981 as a last resort for clients who have lost money, property or other items of value as a result of dishonest conduct by their attorney.
The Fund is financed through an annual fee paid by Hawai`i attorneys who handle client funds and is administered – in accordance with Rule 10 of the Hawai`i Rules of Supreme Court – by five trustees appointed on a voluntary basis by the Supreme Court. None of the money reimbursed (which covers losses up to $100,000 per claimant or $300,000 per attorney) comes from money paid to attorneys by their clients or from tax dollars. All claims are settled by the trustees with investigative and administrative assistance from the Office of Disciplinary Counsel (ODC), an agency of the Supreme Court of Hawai`i.
To qualify for relief from the Fund, the following conditions must be met:
- The claimant (who is the person filing for reimbursement) must have engaged the attorney in Hawai`i when the problem occurred;
- The attorney must have been licensed to practice law in Hawai`i;
- The attorney must have had an office in Hawai`i;
- The attorney must have been acting as the claimant’s attorney or fiduciary;
- Claims must be filed within two years of the loss; and
- The attorney in question must have engaged in dishonest conduct. (Dishonest conduct includes activities such as embezzlement, refusal to refund unearned fees or deposits, and borrowing money with no intention or ability to repay it.)
Additionally, the lawyer involved must meet one of these requirements:
- The lawyer is either deceased, bankrupt or has been declared incompetent;
- The lawyer has either been disbarred, suspended or has resigned from practicing law;
- The lawyer has been convicted of a crime that shows dishonest conduct;
- The lawyer has left Hawai`i or disappeared; or
- The claimant has obtained a judgment against the lawyer due to dishonest conduct.
In some situations, the trustees may require that the claimant exhaust all collection avenues before filing a claim.
Types of Losses Not Covered by the Fund
- The losses of a spouse, children, parents, grandparents, siblings, partners, associates, employers and employees of, or business entities or trusts owned or beneficially owned by an attorney causing the losses
- The losses covered by any bond, surety agreement, or insurance contract to the extent covered thereby, including any loss to which any bondsman or surety or insurer is subrogated to the extent of that subrogated interest.
- The losses of any financial institution which are recoverable under a “banker’s blanket bond” or similar insurance or surety contract.
- Losses in which the claimant and attorney disagree on the quality of the legal services provided or the fee charged. This does not necessarily constitute dishonest conduct.
Note: Claims of negligence or malpractice are not covered by the Fund. Those claims should be pursued through other agencies such as the Office of Disciplinary Counsel.