N.Y. Judiciary Law § 468-b: Clients' security fund of the state of New York

§ 468-b. Clients' security fund of the state of New York. 1. The court

of appeals shall appoint a board of trustees to administer the lawyers'

fund for client protection of the state of New York established pursuant

to section ninety-seven-t of the state finance law. Such board shall

consist of seven members. Of the trustees first appointed, three shall

be appointed for a term of three years; two for a term of two years; and

two for a term of one year. As each such term expires, each new

appointment shall be for a term of three years. The court of appeals may

require such reports or audits of the board as it shall from time to

time deem to be necessary or desirable.

2. The board shall have the power to receive, hold, manage and

distribute the funds collected hereunder for the purpose of maintaining

the integrity and protecting the good name of the legal profession by

reimbursing, in the discretion of the trustees to the extent they may

deem proper and reasonable, losses caused by the dishonest conduct of

attorneys admitted to practice in this state. For purposes of this

section, the term "dishonest conduct" shall mean misappropriation or

wilful misapplication of clients' money, securities, or other property,

by an attorney admitted to practice in this state.

3. The board of trustees shall adopt regulations for the

administration of the lawyers' fund for client protection of the state

of New York and the procedures for presentation, consideration,

allowance and payment of claims, including the establishment of a

maximum limitation for awards to claimants.

4. The board of trustees shall have the sole discretion to determine

the merits of claims presented for reimbursement, the amount of such

reimbursement and the terms under which such reimbursement shall be

made. Such terms of reimbursement shall require that the claimant

execute such instruments, take such action or enter into such agreements

as the board of trustees shall require, including assignments,

subrogation agreements and promises to cooperate with the board of

trustees in making claims against the attorney whose dishonest conduct

resulted in the claim.

5. The board of trustees shall serve without compensation but shall be

entitled to receive their actual and necessary expenses incurred in the

discharge of their duties.

6. The board of trustees may employ and at pleasure remove such

personnel as it may deem necessary for the performance of its functions

and fix their compensation within the amounts made available therefor.

7. The board of trustees shall be considered employees of the state

for the purpose of section seventeen of the public officers law.

8. All payments from the lawyers' fund for client protection of the

state of New York shall be made by the state comptroller upon

certification and authorization of the board of trustees of said fund.

9. Acceptance of an award of reimbursement from the lawyers' fund for

client protection shall, to the extent of such award, (a) subrogate the

fund to any right or cause of action that accrued to the claimant as a

consequence of the dishonest conduct that resulted in the claimant's

award and (b) create a lien in favor of the fund that shall attach to

any money asset that is designated to be paid to the claimant from, or

on behalf of, the attorney who caused the claimant's loss. If the fund

fully reimburses the claimant's loss, as determined by the board of

trustees, the lien shall be in the amount of the fund's award. If the

claimant's loss exceeds the fund's award, the lien shall not extend to

the claimant's right to recover additional restitution from the attorney

for the claimant's unreimbursed loss. In the event of a recovery by the

fund, a claimant shall be entitled to any money recovered in excess of

the fund's award of reimbursement to the claimant.