Why was it created?

Nevada lawyers believe that the public has a right to hold the legal profession accountable for the actions of its individual members. The Bar established and now assures funding for the Clients' Security Fund in order to help reimburse those clients who have sustained a monetary loss as the result of a dishonest act of a Bar member. The State Bar of Nevada administers stringent admission standards and a strict disciplinary process that governs all of its members. (Discipline is a separate function of the State Bar.) On the rare occasions when a lawyer misappropriates or mishandles client funds, the Clients' Security Fund steps in to honor the debt through whole or partial reimbursement.

How is it funded?

The State Bar finances the Clients’ Security Fund through an annual assessment of the active lawyers licensed to practice in Nevada. A portion of the fees charged to pro hac vice applicants (out-of-state attorneys applying to practice in Nevada for a particular case in this jurisdiction) is allocated to the Fund. Additionally, the Fund receives donations from attorneys licensed in the State. The voluntary nature of the Fund demonstrates the genuine desire of the Bar to compensate deserving clients.

Who is eligible to receive funds?

Funds may be filed by any person who has lost money or property because of the dishonest conduct or mishandling of funds by a Nevada lawyer, provided that (1) the accused attorney has died, disappeared, relinquished practice, or has been disbarred or suspended; (2) the dishonest act occurred within an attorney-client relationship; (3) the alleged act was the mishandling or embezzling of funds or property, not malpractice or negligence; and (4) the claimant has made a reasonable attempt to recover from the lawyer within a reasonable amount of time.

Funds do not cover losses resulting from an attorney's negligence. Also, losses resulting from situations in which the attorney and client have entered into a personal business relationship outside the attorney-client relationship are not reimbursable from the Fund. Such matters may be reported to the State Bar of Nevada for disciplinary action or may be the subject of malpractice suits.

How do I file a claim?

Download an Application for Reimbursement or request one from the State Bar of Nevada. Fill out the form as completely as possible and return it as directed. You should keep a copy of the completed form for your records. You should include copies of any documentation that you feel will prove what you allege in your claim. This includes: your fee agreement with the attorney, if you had one; canceled checks; receipts; and documentation of how you have attempted to resolve the issue with the attorney before contacting the Clients’ Security Fund.

It is not necessary to retain a lawyer to submit a claim or to represent you. If a lawyer is retained, it is the policy of the Clients' Security Fund Committee that no fee or other compensation be paid by the Clients' Security Fund to an attorney who assists in the preparation of a claim.

Is there a limit as to when I can file a claim?

The claim must be filed no later than seven (7) years after you knew or should have known of the lawyer’s dishonest conduct.

What happens after I file my claim?

The Clients' Security Fund Committee will investigate each case and claim filed. A committee representative may contact you for further information and will attempt to contact the lawyer named in the complaint. If the claim as submitted is complete and found to be eligible under the rules listed above, it will be presented to the committee for final consideration and decision.

In determining the amount of reimbursement allowable, various factors are considered, including the amount in the fund at the time the claim is made. Some claims may be very large and, if full reimbursement were made to the client, no one else would receive funds. By limiting the dollar amount of reimbursement provided to some individuals, the funds will not be exhausted in a short period of time. Instead, partial awards can be given to more individuals.

Payment from the Clients' Security Fund is not automatic. After reviewing a claim, the committee may decide against reimbursement. In that case, a written explanation is issued.

In some instances, consideration of a claim may be delayed pending pursuit by the claimant of other possible sources of recovery (for example, forgery claims, estate proceedings) or possible disciplinary proceedings against a lawyer. Completion of the disciplinary action often can be very helpful to the final decision on a claim.

What is the maximum amount recoverable?

The maximum amount which any Applicant may recover from the Fund arising from a relationship with an attorney is $50,000.00. However, if there is insufficient funding available to pay all the approved claims in a year, each claim shall be reduced proportionately (prorated) to conform to the limited resources available.