Amendment to Alabama Bar Client Security Fund Rule IX

The Alabama Client Security Fund Rules provide a reimbursement mechanism for those claiming to have suffered a “reimbursable loss” based on the “dishonest conduct” of an Alabama lawyer acting as an attorney or fiduciary where the lawyer has either died, bankrupted, resigned from the practice of law, left the jurisdiction and can’t be found, become a judgment debtor of the applicant, has been convicted of a crime, adjudicated incompetent, disbarred or suspended.

Claims are adjudicated by the Client Security Fund Committee, which makes its recommendations to the State Bar for reimbursement and for prosecution of claims for restitution to the Fund. The Alabama State Bar assesses all Alabama lawyers an annual $25 fee, which provides the financial backing for the Fund.

Effective March 1, 2024, the Supreme Court adopted an amendment to Rule IX of the Alabama State Bar Client Security Fund Rules, providing that payments from the Fund are not a matter of right and shall be in the sole discretion of the Committee. No client or member of the public has a right in the Fund as a third-party beneficiary.

The amendment further provides that one applicant may recover no more than $100,000 from an instance or course of dishonest conduct, and the aggregate maximum all applicants may recover from an instance or course of dishonest conduct is limited to $270,000.

Read the actual ruling here.