X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
money coinsEvery two years, all lawyers registered to practice in New York state file with the Office of Court Administration. From each registration fee, $30 are annually directed to the Lawyers’ Fund for Client Protection (the Fund), which in turn has generated the astronomical sum of $226,000,000 in payouts to law clients who were victimized by a small fraction of thieving attorneys. The Fund, which was a creation of the State Legislature in 1981, and overseen by the seven judges of New York’s Court of Appeals, uses not one dollar of taxpayer money, nor are we affiliated in any way with more widely known IOLA program.

Columbia Law alumnus William R. Nojay, a single practitioner in Monroe County, had a career of accomplishments. A former appointee of Governor Pataki, a director of a not-for-profit foundation, and state assemblyman, he nonetheless found the time to steal over $1 million from a trusting client. The theft came from an escrow fund that Nojay established for his client during the course of an international dispute. Nojay returned $700,000, leaving his client with a $337,000 loss, which was refunded in full by the Fund.

While the Fund has a finite budget, it has over the years been able to raise its reimbursement ceiling from a low of $25,000 in the 1980s to its present maximum of $400,000 per victim. Thus, while Mr. Nojay’s octogenarian client was devastated by the lies and breach of trust he suffered, he had no direct loss of money. The Fund has been able to achieve this level of recompense through three principal sources. The most significant funding is, as noted at the outset, from the annual $30 fee provided by the 332,000 lawyers presently registered to practice law in New York state. A second resource has been occasional financial sanctions, judicially imposed on lawyers arising from an attorney engaging in frivolous motion practice or failing to make a court appearance, which over the years has totaled $3.7 million. From time to time, more often when attorneys retire or die, money held in escrow accounts cannot be distributed to the rightful owners, either because the clients can no longer be found or the contact information accompanying the escrow account is inadequate. As a result, that money is forwarded to the Fund for safekeeping, and our own follow-up efforts to identify the rightful owner. Since given this responsibility in 1994, the Fund has indemnified more than 664 escrowees, to whom their money was returned. After five years, if no further identification can be obtained, the Fund uses that money to assist in the reimbursement of law client victims. As a result, for the past 38 years, the Fund has reimbursed, in full, over 94% of law client victims.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.