Supreme Court Rules Table of Contents
(1) Purpose. The purposes of the Public Protection
Fund are to provide a public service and to promote public confidence in the
administration of justice and the integrity of the legal profession by providing
some measure of reimbursement to victims who have lost money or property caused
by the defalcation of lawyers admitted to practice law in this jurisdiction
occurring in New Hampshire and in the course of the client-lawyer or fiduciary
relationship between the lawyer and the claimant.
(2) Establishment of the Fund. The New
Hampshire Bar Association shall provide a Public Protection Fund establishing a
reimbursement mechanism for proven losses resulting from embezzlement,
conversion, or theft of client funds by lawyers, and for this purpose, the court
shall annually assess a sum to be paid by all dues-paying members of the New
Hampshire Bar Association, except those members exempted by order of the court.
The Public Protection Fund shall be administered by the New Hampshire Bar
Association. Subject to the review and approval of the court, the committee
established pursuant to paragraph (5) shall determine the terms, conditions,
claims procedures, scope of coverage, cost, and funding mechanisms for such
Public Protection Fund, consistent with this rule. The Public Protection Fund is
provided as a public service to persons utilizing legal services; the
establishment, administration and operation of the Public Protection Fund shall
not impose or create any obligation on, expectation of recovery from, or
liability of the New Hampshire Bar Association, its officers, governors,
members, staff, or members of the Public Protection Fund committee. No claimant
shall have a legal interest in the fund nor have a right to receive any portion
except as awarded pursuant to this rule.
(3) Claims Against the Fund. Claims for
payment from the fund shall be submitted in writing, under oath, and shall
explain specifically the defalcations which led to the losses in question. Such
claims must be submitted within three years of the time when the victim
discovered or first reasonably should have discovered the defalcations and the
resulting losses, but in no event later than one year after the lawyer in
question has been suspended or disbarred from practice, or has died or been
judged mentally incompetent before the suspension or disbarment proceedings have
been commenced or concluded.
(4) Payments from the Fund. Payments
from the fund will be made only after the lawyer in question has been suspended
or disbarred from practice; or if the lawyer has died or been judged mentally
incompetent before the suspension or disbarment proceedings have been commenced
or concluded. As a condition of payment from the fund, the claimant shall
execute a subrogation agreement in favor of the fund against the offending
lawyer and the offending lawyer's law firm and against third parties to the
extent of the amount recovered by claimant from the fund. Payments from the fund
shall be made only after exhaustion of all available assets, insurance, and
sureties of the offending lawyer and the offending lawyer's law firm. Payments
from the fund shall be made only to victims who have lost money or property as
the result of the defalcation of the lawyer, and no payments shall be made to
any assignee, subrogee, or successor of such victim. The heirs or legatees of
deceased victims may be eligible for payment from the fund. Except with
respect to claims where the amount determined by the committee to be due the
claimant is less than $2,500, payments from the fund shall be made only at the
end of each fund year. Except with respect to claims where the amount
determined by the committee to be due the claimant is less than $2,500, payments
from the fund with respect to an individual lawyer shall not be made until all
claims have been finalized with respect to that lawyer. The maximum amount of
reimbursement to all claimants against the fund in respect to all conduct of any
one lawyer shall be $250,000 in the aggregate. In determining whether the
maximum reimbursement described in the immediately preceding sentence (but not
the sentence immediately following this sentence) has been reached, claims where
the amount determined by the committee to be due the claimant is less than
$2,500 shall be excluded from the calculation. The maximum amount of
reimbursement to any one claimant, or all claimants, against the fund in any
fund year as defined in paragraph (6) shall be $250,000 and $1,000,000,
respectively, in the aggregate. The maximum amount which may be paid on a claim
shall be the dollar value of the money or property lost by lawyer defalcation
and shall not include interest on the amount lost or money spent attempting to
collect the loss. If payable claims against a lawyer exceed $250,000, then all
payable claims against that lawyer, except claims where the amount determined by
the committee to be due the claimant is less than $2,500, shall be reduced in
proportion to their relative value in order to reduce total payments as a result
of that lawyer's conduct to $250,000. If payable claims in a single fund year
exceed $1,000,000, then all payable claims for that fund year shall be reduced
in proportion to their relative value in order to reduce total payments for that
year to $1,000,000. That portion of payable claims excluded from payment
by reason of the dollar limitations described in this section shall not be paid
in any subsequent fund year.
(5) Administration of the Fund. The Public
Protection Fund shall be administered by a nine member committee, appointed by
the President of the New Hampshire Bar Association with the approval of the
association's Board of Governors, which committee shall include at least two
public members. Five members shall constitute a quorum. All decisions of the
committee shall be made by a majority of the members present and voting. The
committee shall have the power to propose regulations to clarify the intent of
this rule, which regulations shall become effective after review and approval by
the court. Decisions of the committee as to whether or not to pay claims and the
amount of payments shall be within the committee's discretion, subject to the
annual limits stated above, and will be reviewable only for unsustainable
exercise of discretion. The committee shall give the offending lawyer
notice of the claim and an opportunity to be heard regarding the claim, and the
findings of fact and rulings of law made by the committee on the claim shall be
binding upon the offending lawyer in all subsequent proceedings to which the
Public Protection Fund is a party, including, but not limited to, proceedings
against the offending lawyer to recover monies paid by the fund to the claimant.
Review of a decision of the committee shall be filed with the New Hampshire
Supreme Court within thirty days of the date of the committee's decision, by
filing a written appeal in accordance with Rule 10, unless otherwise ordered by
the court. The appeal shall not be a mandatory appeal. In the event
that review of a decision of the committee is sought, a copy of the appeal shall
be mailed or hand-delivered to the New Hampshire Bar Association at the same
time as the appeal is filed with the supreme court. If the New Hampshire
Bar Association wishes to participate in the review of the decision, it shall
file an appearance in the matter within thirty (30) days of receipt of the
appeal. Decisions of the New Hampshire Supreme Court shall be final.
Within 120 days after the end of each fund year, the New Hampshire Bar
Association shall report to the court about the claims made, approved and paid,
assessments received, income earned, and expenses incurred in the preceding fund
year. Reasonable expenses incurred by the New Hampshire Bar Association in
administering the fund, including overhead, staff time, and professional fees,
shall be reimbursed by the fund as a cost of operation, subject to the review
and approval of the court.
(6) Effective Date. This rule shall take
effect on June 1, 1998, and payments from the fund shall be made only for
defalcations occurring on or after that date. Fund years shall run from June 1
to May 31. Provided, however, that the provisions increasing the maximum
amount to $250,000 and the provisions regarding claims of less than $2,500 shall
apply only for defalcations occurring on or after January 1, 2010.