The Client Security Fund of the Oregon State Bar was created in 1967 to help reimburse clients who suffer a financial loss as a result of dishonest conduct of their lawyer. Oregon lawyers developed the program and fund it with a portion of the mandatory dues paid by all active members of the Oregon State Bar. The fund represents an effort by members of the Oregon State Bar to compensate for the misdeeds of a few lawyers. Claims for reimbursements are reviewed by a committee of volunteers, including a public member. All reimbursements are made by the Oregon State Bar Board of Bar Governors.
| Download Client Security Fund application form |
The Client Security Fund will consider a monetary award to reimburse a client for money or property taken by an Oregon lawyer if:
- the loss occurred within an established lawyer/client relationship or a fiduciary relationship related to the lawyer’s practice of law;
- as a result of the dishonest conduct, the lawyer was found guilty of a crime; a civil judgment was obtained against the lawyer; or, if the loss if $5,000 or less, the lawyer was disbarred, suspended, reprimanded or resigned from the bar;
- the claimant has made a reasonable attempt to recover the amount claimed without success, and
- the claim is filed with the bar within two years after the latest of: the lawyer’s conviction, judgment date, or date of disbarment, suspension, reprimand or resignation; or the date the claimant knew or should have known of the loss. No claim will be considered if submitted more than six years after the loss.
The following types of losses are not covered:
- losses that are the result of lawyer negligence or malpractice;
- losses from business or investment relationships between lawyer and client, including loans to the lawyer;
- damages, lawyer’s fees, or interest;
- losses covered by an insurance or surety contract or bond.
A person wishing to make a claim for reimbursement must submit a notarized Application for Reimbursement. The form is available from the Oregon State Bar General Counsel’s Office, by calling (503) 620-0222, or toll-free in Oregon (800) 452-8260. The form can be filled in online and downloaded here.
Claims must be presented by the injured client or the client’s conservator, personal representative, guardian ad litem, trustee, or attorney in fact. A third party who has paid the client’s fees may not make claim directly, but the client can who submits the claim can authorize reimbursement to the third party.
Claimants do not need a lawyer to submit the claim; however, bar members are encouraged to assist claimants without charge in preparing or presenting claims. A claimant who would like assistance in presenting a claim may ask the bar to supply the name of a volunteer lawyer.
Applications for Reimbursement are reviewed by General Counsel’s Office staff and, if complete, assigned to a member of the Client Security Fund Committee for investigation and report. The Client Security Fund Committee reviews all committee members’ reports and determines if the claim is eligible for payment. If the committee recommends a claim for payment, it is forwarded to the OSB Board of Governors for final approval. Payments from the Client Security Fund are discretionary and are not a matter of right. If the Committee decides against reimbursement, claimants receive a written explanation and may request review by the Board of Governors. The Board’s decision on review is final.
The thorough investigation and orderly processing of complaints requires time to complete, usually 6 to 18 months, depending upon the nature of the investigation and the meeting schedules of the Client Security Fund and the Board of Bar Governors. Delays are sometimes the result of insufficient information or documentation or pending legal or disciplinary proceedings. Every effort is made to process each claim as quickly as possible.
Claimants must provide all necessary information and documentation to prove that their claims are eligible for reimbursement. Claimants must show evidence of their efforts to recover the lost money or property from the lawyer and may be required to seek recovery from others who may be liable for the loss, such as a bonding or insurance company, a bank that honors a forged instrument, or the partners of the defalcating lawyer.
The Client Security Fund was created for a specific purpose and does not cover all monetary disputes between lawyers and clients. (For example, the fund may deal with the theft of a client’s trust account funds, but does not cover losses due to malpractice even when the client may suffer monetary loss.) If a problem is not covered by the Fund, there may be other Oregon State Bar resources or programs that can help, including:
- Client Assistance Office (reviews all inquiries and complaints about lawyer conduct and refers them to Disciplinary Counsel's Office if appropriate; may be able to provide some assistance in minor disputes between clients and lawyers over file release and communication issues);
- Professional Liability Fund (malpractice insurance carrier for Oregon lawyers) ;
- Fee Arbitration Program (voluntary program for resolving fee disputes between lawyer and client);
- Lawyer Referral Service (referrals to lawyers in private practice).
How is the Fund financed?
The Fund is financed by mandatory annual assessments of Oregon lawyers. No tax dollars are used. The nature of the Fund demonstrates the genuine desire of Oregon lawyers to maintain the legal profession’s reputation for honesty by compensating clients for the dishonest actions of a few of its members.
How can I prove my loss?
The best way to prove a loss is to provide copies of cancelled checks or receipts showing payment of fees or receipt of other money by the lawyer on the client’s behalf, a written fee agreement, correspondence with the lawyer or any other papers showing how much money the lawyer received and, in cases involving unearned fees, documents reflecting what work was done (or not done) by the lawyer.
How much can I recover?
The amount paid by the Client Security Fund will depend on the type and amount of your loss. No reimbursement will exceed the amount of fees actually paid or money actually received by the lawyer on the client’s behalf. The maximum reimbursement per claim is $50,000.
Does the Fund seek to recover payments made?
In exchange for a reimbursement award, the Fund takes an assignment of the claimant’s rights against the lawyer or others who may be liable for the loss. The Fund vigorously pursues collection against defalcating lawyers and collateral sources where appropriate.
What if I disagree with the fees charged by my lawyer?
The Oregon State Bar has a separate voluntary fee arbitration program for resolving fee disputes. The Client Security Fund may reimburse the unearned portion of a fee if there is evidence that the lawyer provided no legal services to the client, that the services provided were of insignificant value, or if there is a decision of a court or other fact-finder that some part of the fee was unearned.
What efforts must I make to collect from my lawyer or third parties?
Required efforts to collect will depend upon the particular circumstances of your case. Ordinarily, for claims over $5,000, a judgment against the lawyer and a reasonable, but unsuccessful, effort to collect the judgment will be required. This requirement may be waived on a showing that efforts to collect from the lawyer will be an undue hardship on the claimant.
What if I am running out of time to file my complaint?
You may file a claim for reimbursement even if you have not yet finished all collection efforts. Depending on the circumstances, the Committee may defer resolution of the matter or reject the claim with permission for you to re-file at a later time.
OSB General Counsel’s Office
General Counsel Staff email
(503) 620-0222 x 334
(800) 452-8260 x 334
