Comment: 1. An agreed-to voluntary suspension is subject to the provisions of SCR 22.26 activities on revocation or suspension of license.
2. Source, s. 256.286, 1975 stats.
12.04SCR 12.04 Wisconsin lawyers' fund for client protection: creation and purpose. A Wisconsin Lawyers' Fund for Client Protection of the state bar of Wisconsin is created to reimburse, to the extent and in the manner provided by this chapter, losses caused by the dishonest conduct of members of the state bar of Wisconsin.
History: Sup. Ct. Order No.
99-03
, 2000 WI 106, 237 Wis. 2d xix; Sup. Ct. Order No.
04-02
, 2004 WI 117, 272 Wis. 2d xiii; Sup. Ct. Order No.
06-04
, 2007 WI 48, 297 Wis. 2d xv.
12.045SCR 12.045 Definitions. In ss. 12.04 to 12.11:
12.045(1)(1) "Attorney" means a person who, at the time of the act complained of, was a member of the state bar of Wisconsin, except a person who was an inactive member at that time.
12.045(2)(2) "Claimant" means a person who has applied to the fund for reimbursement.
12.045(3)(3) "Client" means a person engaging the professional legal services of an attorney or for whose benefit the attorney is acting in a fiduciary capacity.
12.045(4)(4) "Committee" means the Wisconsin lawyers' fund for client protection committee.
12.045(5)(5) "Dishonest conduct" means any of the following:
12.045(5)(a)(a) A willful act committed by an attorney that causes a reimbursable loss to a client in the manner of defalcation or embezzlement of money.
12.045(5)(b)(b) The intentional taking or conversion of money, property or other things of value.
12.045(5)(c)(c) The failure to refund an unearned advanced fee.
12.045(6)(6) "Fund" means the Wisconsin lawyers' fund for client protection of the state bar of Wisconsin.
12.045(7)(a)(a) "Reimbursable loss" means a loss of money or other property of a client that meets all of the following conditions:
12.045(7)(a)1.1. The loss was caused by the dishonest conduct of an attorney while performing services under his or her license to practice law in Wisconsin.
12.045(7)(a)2.2. The attorney was acting either as attorney in the matter out of which the loss arose or in a fiduciary capacity customary to the practice of law.
12.045(7)(a)3.e.e. Consented to the revocation of his or her license to practice law;
12.045(7)(a)3.h.h. Been adjudged guilty of a crime based upon the dishonest conduct of the attorney; or
12.045(7)(a)4.4. The act that occasioned the loss occurred on or after March 1, 1981.
12.045(7)(b)(b) "Reimbursable loss" does not include any of the following:
12.045(7)(b)1.1. Losses of a spouse, child, parent, grandparent, sibling, partner, associate, or employee of the attorney or attorneys causing the losses.
12.045(7)(b)2.2. 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.
12.045(7)(b)3.3. Losses of any financial institution that could be recoverable under a "banker's blanket bond" or similar insurance or surety contract, whether or not the institution had such bond or contract in force.
12.045(7)(b)5.5. Losses barred under any applicable statute of limitations.
12.045(8)(8) "State bar" means the state bar of Wisconsin.
History: Sup. Ct. Order No.
06-04
, 2007 WI 48, 297 Wis. 2d xv.
12.05SCR 12.05 Administration.
12.05(1)(1) The fund shall be operated and administered by the committee of the state bar to be known as the Wisconsin lawyers' fund for client protection committee. The committee shall consist of 5 lawyers and 2 nonlawyer members who are appointed by the president of the state bar. The initial terms of the members are: one lawyer to serve until July 1, 1982; one lawyer to serve until July 1, 1983; one lawyer and one nonlawyer member to serve until July 1, 1984; one lawyer to serve until July 1, 1985; one lawyer and one nonlawyer member to serve until July 1, 1986. Upon the expiration of the initial appointments, each subsequent appointment shall be for a term of 5 years. No person who has served a full term of 5 years shall be eligible for reappointment until one year after the termination of his or her last term. A vacancy on the committee shall be filled by appointment by the president of the state bar for the unexpired term.
12.05(2)(2) Each year the chairperson of the committee shall be appointed by the president of the state bar from among the members of the committee. The committee shall meet from time to time upon the call of the chairperson.
12.05(3)(3) The committee members shall serve without compensation but shall be entitled to reimbursement from the fund for their expenses reasonably incurred in the performance of their duties.
History: Sup. Ct. Order No.
99-03
, 2000 WI 106, 237 Wis. 2d xix; Sup. Ct. Order No.
04-02
, 2004 WI 117, 272 Wis. 2d xiii.
12.06SCR 12.06 Powers and duties of the committee.
12.06(1)(1) Consideration of claims. The committee shall consider applications for reimbursement from the fund for losses caused by the dishonest conduct of an attorney. The committee shall investigate claims of losses coming to its attention and may reject or allow claims in whole or in part.
12.06(2)(2) Committee discretion. The committee may, in its discretion, determine the order and manner of payment of claims. In cases of extreme hardship or if other interests of justice so warrant, the committee may, in its discretion, recognize a claim which would otherwise be excluded under this chapter.
12.06(3)(3) Rules of procedure. The committee shall adopt rules of procedure not inconsistent with this chapter for the management of the fund and its affairs, for the presentation of claims, for the processing and payment thereof and for the subrogation or assignment to the state bar for the benefit of the fund of the rights of the claimant to the extent paid from the fund.
12.06(4)(4) Investment. All sums received by the state bar for the fund shall be maintained in a separate account and shall be managed by the state bar pursuant to the provisions of SCR chapter 10 and the state bar bylaws pertaining to the investment and management of state bar assets, subject to the written direction of the committee under rules adopted by the committee.
12.06(5)(5) Use of funds. The committee may use the fund for any of the following purposes within the scope of the fund's objectives:
12.06(5)(a)(a) To make payments on claims as provided in this chapter.
12.06(5)(b)(b) To purchase insurance to cover such payments in whole or in part as is deemed appropriate.
12.06(5)(c)(c) To pay the reasonable and necessary expenses of the committee and administration of the fund.
12.06(6)(6) Access to office of lawyer regulation files. Notwithstanding other supreme court rules to the contrary, during the investigation of a claim the committee or its designee shall have access to the files of the office of lawyer regulation which pertain to the alleged loss.
12.06(7)(7) Audit and report of activities. The fund shall be audited by auditors annually and at such other times as the supreme court shall direct, such audits to be at the expense of the fund. The annual audit shall be included in a report to be submitted annually by the committee to the supreme court reviewing in detail the administration of the fund and the committee's activities during the preceding year.
12.06(8)(8) Enforcement of claims. The committee may press claims which the state bar may have on behalf of the fund and may pay all reasonable and necessary expenses connected therewith.
History: Sup. Ct. Order No.
99-03
, 2000 WI 106, 237 Wis. 2d xix; Sup. Ct. Order No.
01-12
, 2001 WI 120, 247 Wis. 2d xiii.
12.07SCR 12.07 Assessment of attorneys; reserve; enforcement.
12.07(1)(1) Initial assessment. Every attorney shall pay to the fund an initial assessment of $5.
12.07(2)(a)(a) Annual assessments. Commencing with the state bar's 2013 fiscal year, every attorney shall pay to the fund an annual assessment of $20. An attorney whose annual state bar membership dues are waived for hardship shall be excused from the payment of the annual assessment for that year. An attorney shall be excused from the payment of the annual assessment for the fiscal year during which he or she is admitted to practice in Wisconsin.
12.07(2)(b)(b) Reserve. As of May 1 of each year, any funds in excess of those required for payment of approved claims shall be maintained in a reserve account for the Wisconsin Lawyers Fund for Client Protection.
12.07(3)(a)(a) Sufficiency of the fund. The committee shall determine the net value of the fund as of May 1 of each year. The committee shall determine the net value of the fund, including the reserve, after deducting all claims which the committee has determined to pay and which are not disposed of at the date of valuation, deferred claims, claims received but not yet considered by the committee, and all expenses properly chargeable against the fund.
12.07(3)(b)(b) Report. The committee shall file a report of the net value of the fund with the supreme court by May 31 of each year.
12.07(4)(4) Collection; failure to pay. The initial assessment and annual assessments shall be collected at the same time and in the same manner as the annual membership dues for the state bar are collected. An attorney who fails to timely pay the initial assessment or any annual assessment shall have his or her right to practice law suspended pursuant to SCR 10.03 (6).
12.07(5)(5) Periodic review. The supreme court shall review SCR 12.07 every five years to determine if the assessment and reserve fund is adequate to timely meet the legitimate claims of clients.
History: Sup. Ct. Order No.
96-15
, 208 W (2d) xxi (1997); Sup. Ct. Order No.
99-03
, 2000 WI 106, 237 Wis. 2d xix; Sup. Ct. Order No.
01-16
, 2002 WI 38, 250 Wis. 2d xv; Sup. Ct. Order No.
10-10
, 2011 WI 26, 332 Wis. 2d xvii.
12.08SCR 12.08 Payment of claims.
12.08(1)(1) Considerations. No claim shall be paid unless there is an affirmative vote for payment of at least 4 members of the committee. In determining payment the committee shall consider, among other appropriate factors, the following:
12.08(1)(a)(a) The amounts available and likely to become available to the fund for the payment of claims and the size and number of claims which are likely to be presented;
12.08(1)(b)(b) The amount of the claimant's loss as compared with the amount of losses sustained by other eligible claimants;
12.08(1)(c)(c) The degree of hardship suffered by the claimant as a result of the loss;
12.08(1)(d)(d) The degree of negligence, if any, of the claimant which may have contributed to the loss;
12.08(1)(e)(e) The existence of any collateral source for the reimbursement of the loss.
12.05(2)(a)(a) The committee shall, by rule, fix the maximum amount which any one claimant may recover from the fund and may, by rule, fix the aggregate amount which may be recovered because of the dishonest conduct of any one attorney.
12.08(2)(b)(b) If the fund is not sufficient to pay all claims which the committee determines should be paid, the committee may, in its discretion, defer payment of all or any portion of one or more claims. If the full amount of the claim has not been paid within 5 years from the date the claim is made, any balance remaining unpaid shall remain unpaid and the claim shall be closed.
12.08(3)(3) Rights to fund. No claimant or any other person or organization shall have any right in the fund as beneficiary or otherwise. All payments from the fund shall be a matter of discretion and not of right.
12.08(4)(4) Attorney's fee. No attorney representing a claimant shall be compensated from any source for his or her services.
History: Sup. Ct. Order No.
99-03
, 2000 WI 106, 237 Wis. 2d xix.
12.09SCR 12.09 Claims for reimbursement.
12.09(1)(1) The claimant shall prepare or cause to be prepared an application for reimbursement containing the following information:
12.09(1)(a)(a) The name and address of the attorney alleged to have caused the loss;
12.09(1)(c)(c) The date or period of time during which the alleged loss was incurred;
12.09(1)(e)(e) A general statement of facts relative to the claim;
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