RULE 12 PROCESSING CLAIMS
- Whenever it appears that a claim is not eligible for reimbursement pursuant to Rule 10, the claimant shall be advised of the reasons why the claim may not be eligible for reimbursement, and that unless additional facts to support eligibility are submitted to the Fund, the claim file shall be closed.
- An order disciplining a lawyer for the same dishonest act or conduct alleged in a claim, or a final judgment imposing civil or criminal liability therefor, shall be evidence that the lawyer committed such dishonest act or conduct.
- The lawyer disciplinary agency shall be promptly notified of the claim and required to furnish a report of its investigation of the matter to the Board. The lawyer disciplinary agency shall allow the Funds representative access to its records during an investigation of a claim. The Board shall evaluate whether the investigation is complete and determine whether the Board should conduct additional investigation or await the pendency of any disciplinary investigation or proceeding involving the same act or conduct that is alleged in the claim.
- The Board may conduct its own investigation when it deems it appropriate.
- The lawyer shall be notified of the claim and given an opportunity to respond to the claim. A copy of the claim shall be provided to the lawyer, or the lawyer's representative. The lawyer or representative shall have 20 days in which to respond.
- The Board may request that testimony be presented to complete the record. Upon request, the claimant or lawyer, or their representatives, will be given an opportunity to be heard.
- The Board may make a finding of dishonest conduct for purposes of adjudicating a claim. Such a determination is not a finding of dishonest conduct for purposes of professional discipline.
- When the record is complete, the claim shall be determined on the basis of all available evidence, and notice shall be given to the claimant and the lawyer of the Boards determination and the reasons therefor. The approval or denial of a claim shall require the affirmative votes of at least four trustees.
- Any proceeding upon a claim need not be conducted according to technical rules relating to evidence, procedure and witnesses. Any relevant evidence shall be admitted if it is the type of evidence upon which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence over objection in court proceedings. The claimant shall have the duty to supply relevant evidence to support the claim.
- The Board shall determine the order and manner of payment and pay all approved claims, but unless the Board directs otherwise, no claim should be approved during the pendency of a disciplinary proceeding involving the same act or conduct that is alleged in the claim.
Rule 12 addresses the procedure for consideration of claim in concert with the disciplinary process. The overall scheme presented is one of cooperation between the Fund and disciplinary authorities pursuant to Paragraph C, while avoiding duplication of effort in Paragraph B but respecting the different needs and autonomous functioning of the respective bodies identified in Paragraphs D and G.
The Rule also seeks to set forth a framework which balances the Funds duty to address the claimant's allegations efficiently with the need to present the respondent lawyer with an opportunity to defend pursuant to Paragraphs E, F and H.
The overriding policy implicit in Rule 12 is that the Board exercises its discretion so as to make the best possible decision as expeditiously as possible in each claim presented. The Board may conduct any investigation it deems appropriate under Paragraph D, including the taking of testimony pursuant to Paragraph F. Paragraph J provides that the order and manner of payment of claims is likewise within the Boards discretion. Paragraph H requires the Board to articulate to each side the rationale for its determination on a given claim. Under Paragraph I, technical rules of evidence shall not be employed to hinder the Board from accomplishing its mission.
Note that under Paragraph H the affirmative vote of at least four Trustees is required in order to dispose of a claim, just as it is for any matter before the Board under Rule 6C. Thus, for example, if the minimum necessary for a quorum is present, any motion that cannot garner unanimous support will fail. A "majority of the quorum present" will not suffice. This Paragraph does not prevent determinations of claims by mail ballot.
Ideally the initial investigation should be done by the lawyer disciplinary agency personnel to avoid duplication of effort and inconsistent findings of both entities. The financial integrity of the Fund is preserved by using existing resources. Investigation by the Board should be utilized to gather additional evidence or to provide evidence in those jurisdictions where the discipline agency is unable to timely reveal the results of the investigation.
As noted in the Comment to Rule 11, in many matters, a criminal conviction or a finding during disciplinary proceedings will establish "dishonest conduct" for purposes of the Boards determination of the claim. A discipline or other agency may, however, lack jurisdiction or have little incentive to act where the lawyer is unlikely to engage in further misconduct. This dilemma is illustrated by lawyers who have died, become mentally or physically incapacitated, fled the jurisdiction, or been disciplined for other reasons. The Board may then be required under Paragraph G to make a finding of dishonest conduct solely for the purpose of the Funds proceeding.
The Fund should have professional staff to assist the Board in investigating claims. Volunteers often cannot devote the same time and attention as staff members.
The Funds investigations should be augmented by subpoena power, consistent with the local rules of civil procedure. While a claimant has the burden of providing satisfactory evidence of a reimbursable loss under Paragraph C of Rule 11, the Board should be given the opportunity to make the best possible decision on each matter before it.
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