Supreme Court Increases Clients' Security Fund Assessment Limit, Committee Disburses 16 Claims

May 6, 2002

On April 18, the supreme court increased the annual attorney assessment limit for the Clients' Security Fund (CSF) from $15 to $25, for the first time in 20 years. On April 24, the CSF Committee set the FY 03 assessment at $20 and approved 16 claims totaling $47,557.

Clients Security Fund Assessment Claims Paid for Fiscal Years 1991 - 2001
Fiscal Year	Annual Assessment	Total Dollars Paid to Claimants
1991	$6	$146,788
1992	$9	$117,732
1993	$15	$134,483
1994	$15	$138,887
1995	$15	$36,945
1996	$0 ($5/new attys)	$62,065
1997*	$0 ($5/new attys)	$11,107
1998	$7	$103,186
1999	$7	$214,607
2000	$15	$338,446**
2001	$15	$252,885***
* Court increased limit per claim and fund balance.
**$81,000 deferred claim, paid in FY01
***$75,000 deferred claim, paid in FY02

"The fund has operated with a deficit for several years," said Wayne Maffei, committee chair. "We have a responsibility to maintain a balance that sufficiently covers future claims and meets the $250,000 balance mandated by the supreme court. The increase in assessment is a first step to eliminate the deficit. The committee's decision to increase to $20 and not $25 was based on the amount of anticipated claims and the dollar amount of claims deferred to our Sept. 23 meeting."

The CSF, which was created by Supreme Court Rule in 1981, administers compensation to clients who have lost money due to dishonest lawyer conduct. The CSF does not compensate clients for negligence or nonprovision of services. A court, and occasionally the Office of Lawyer Regulation, makes the initial findings of theft. The CSF is the last resort.

Claims increased. "Several well-publicized incidents of theft have increased public awareness of the fund resulting in more claims," continued Maffei. "That's a good thing. It doesn't mean that there is more theft going on, it means we're doing our job - serving public interest."

Maffei appeared before the supreme court at the April hearing to request the increase in the assessment limit. "For the Bar to fulfill the supreme court mandate, it must increase the maximum annual assessment cap," Maffei told the court. "This doesn't mean the CSF Committee will assess the maximum every year. If we get a year or two at the $25 maximum, we hope to reduce the assessment level. Right now we can't fund the claims we are approving." Last November, the Board of Governors unanimously approved the CSF Committee's request to petition the supreme court for the increase.

In 1997, the court raised the limit per claim from $45,000 to $75,000 and the fund balance from $150,000 to $250,000; however the lawyer annual assessment ceiling has not increased from the $15 set in 1981. The annual assessment varies from year to year - from $7 to $15 in recent years. The supreme court mandates that the Bar maintain a fund balance of $250,000 as of May 1 each year. Over the last few years, the fund has paid out claims in excess of $250,000, which resulted in deferring some claims to the following year and beginning the next fiscal year below the required level.

Reimbursements approved. At its April 24 meeting, the CSF Committee approved reimbursements totaling $47,557 to 16 victims of lawyer theft. The committee considered 24 claims, approved 16 for reimbursement, denied six, and deferred a decision on two claims to its next meeting scheduled for Sept. 23. Approved claims are against 10 attorneys, eight of whom have had their law license suspended or revoked, and two who hold active licenses.

Claims were approved for clients of Susan Cotten (one claim for $1,200), Lee Erlandson (four claims totaling $12,038), Joseph Jackson (one claim for $1,000), Perry Lieuallen (two claims totaling $4,467), Christopher O'Byrne (one claim for $10,000), Matthew Olaiya (one claim for $10,000), Judith A. Pinchar (one claim for $1,100), Mark Prichard (three claims totaling $1,694), and two claims totaling $6,058 against two lawyers who hold active licenses.

All Wisconsin-licensed attorneys, except those classified as inactive, subsidize the fund. The State Bar administers the fund according to SCRs 12.04 - .11 as a public service. The mandatory annual assessment is collected with Bar dues.