Wyoming Supreme Court Adopts New Client Protection Fund Rules

May 17, 2017 - Member Announcements

On May 16, 2017, the Wyoming Supreme Court issued an order adopting Rules for the Client Protection Fund of the Wyoming State Bar, effective July 1, 2017. The order repealed prior rules governing the Clients’ Security Fund, which had long been in need of updating.

The stated purpose of the Client Protection Fund is to promote public confidence in the administration of justice and the integrity of the legal profession by reimbursing losses caused by the dishonest conduct of lawyers licensed to practice law in Wyoming occurring in the course of the lawyer-client relationship. “Dishonest conduct” is defined as wrongful acts committed by a lawyer in the nature of theft or embezzlement of money or other wrongful taking or conversion of money, property or other things of value, including failure to refund fees received in advance as required by Rule 1.16 of the Wyoming Rules of Professional Conduct.” “Lawyer” is defined as “a member of the Wyoming State Bar, including deceased members and recently suspended or disbarred members whom clients reasonably believed to be authorized to practice law when the dishonest conduct occurred.”

The new rules provide for submittal of claims on a prescribed form, which will be reviewed by a Court-appointed Client Protection Fund Committee consisting of nine members of the Wyoming State Bar, one member from each judicial district. The Committee may perform such investigation as it deems appropriate, including reviewing the lawyer’s response to the claim (where one is made) and render a determination. Reimbursement from the Fund is discretionary, and there can be no appeal from a decision of the Committee.

Payment of claims is limited to $15,000 per claimant per calendar year, unless the Board of Officers and Commissioners approves a larger payment. As a condition of payment, a claimant will be required to assign the claimant’s rights against the lawyer so that the Committee may commence an action as subrogee. The lawyer on whose behalf a claim is paid is liable to the Fund for restitution, including interest and expenses incurred by the Fund in processing the claim.

The new rules provide that lawyers may not accept payment for assisting a claimant in attempting to recover from the Fund, noting, “The Court encourages members of the Bar to assist claimants as a form of pro bono service.”

During 2016, $30,000 in Clients’ Security Fund claims were paid from funds allocated for that purpose by the Board of Officers and Commissioners. Under the new rules, the Client Protection Fund will similarly be funded by budget allocations designated for such purpose by the Board.

Order Adopting Rules for the Client Protection Fund

Questions? Please contact Shannon Howshar at (307) 432-2104.