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Model Rules for Lawyers' Funds for Client Protection - Rule 14

Rule 14 - Payment of Claims for Reimbursement

  1. The Board may from time to time fix a maximum amount on reimbursement that is payable by the Fund.
  2. Payment of reimbursement shall be made in such amounts and at such times as the Board deems appropriate and may be paid in lump sum or installment amounts.
  3. If a claimant is a minor or an incompetent, the reimbursement may be paid to any person or entity authorized to receive the reimbursement for the benefit of the claimant.


Full reimbursement is the goal of a Fund, and adequate financing is essential to its achievement. Realistically, however, this ideal must be tempered with a Fund’s need to provide all eligible claimants with meaningful, if not total, reimbursement for their losses.

A maximum limitation on reimbursement permits the assets of a developing Fund to accumulate while an historical "claims presented" record is established. It also serves to protect established Funds from catastrophic losses. Toward that end, Paragraph A authorizes the Board to fix a maximum limitation on reimbursement, whether for individual losses, or for the aggregate for all losses sustained by the clients of an individual lawyer.

An aggregate limitation is permitted under Paragraph A, but it is not encouraged. An aggregate limitation has the potential of unfairness and is inconsistent with the goal of providing full reimbursement to all eligible claimants. Unless clearly required by a new and developing Fund, it should not be utilized. When utilized, the Board should aim for its elimination as soon as the Fund’s fiscal conditions permit.

Maximum limitations, whether individual or aggregate, should be reviewed periodically in light of the Fund’s actual experience in providing reimbursement to eligible claimants for their documented losses.

Paragraph B assigns responsibility for the determination of the actual amount of each reimbursement to the discretion of the Board.

Paragraph B also grants the Board flexibility in paying reimbursement. Depending on a Fund’s financial and administrative needs, periodic payment dates can be established, and reimbursement can be paid in lump sums or in installments.

Similarly, where losses involve minors and incompetents, Paragraph C permits the Board to pay the reimbursement directly to a parent or legal representative, for the benefit of the claimant.

Next- Rule 15 Reimbursement from the Fund is Discretionary

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