Section 2-71.—Eligible Claims

This rule sets the eligibility rules for client security fund claims. A claim must rest on the dishonest conduct of an attorney who, at the time of the defalcation, was a member of the Connecticut bar and engaged in practicing law in the state.

Beyond that, a claim is eligible only if three things are true: the attorney was acting as an attorney or fiduciary in the matter where the loss arose; the attorney has died, been adjudged incapable or insane, been disbarred or suspended, been placed on probation or inactive status, resigned from the bar, or become a judgment debtor to the claimant on the claim; and the claim is presented within four years of when the claimant discovered or reasonably should have discovered the dishonest acts and losses, or was already pending before the Connecticut Bar Association’s client security fund committee when this rule took effect.

Certain losses are not eligible for reimbursement unless the hardship exception applies: losses to the attorney’s spouse, children, parents, grandparents, siblings, partners, associates, and employees; losses covered by a bond, surety agreement, or insurance contract, to the extent covered; losses to financial institutions recoverable under a banker’s blanket bond or similar coverage; losses to any business entity controlled by the attorney or by those excluded family members and associates; and losses to any governmental entity or agency.

The client security fund committee can still consider an otherwise-excluded claim eligible in cases of extreme hardship or special and unusual circumstances. And the committee may deny a claim, in its discretion, where it appears there would be unjust enrichment or where the claimant unreasonably or knowingly contributed to the loss.