Category: Legal Malpractice Posted on Dec 19, 2017

Seeking Financial Compensation For Financial Losses Suffered From An Attorney’s Dishonesty

Seeking Financial Compensation For Financial Losses Suffered From An Attorney’s Dishonesty
The relationship between a client and an attorney is based on trust, and when the attorney breaks that trust, it can be very difficult for the client to regain it. It is also difficult for the client to obtain reimbursement for any resulting financial losses. Attorneys who steal from their clients not only break the trust between them and their clients, they also break the law and can be charged with a criminal offense.

Some attorneys who steal from their clients are stealing from clients who are vulnerable and who do not have much to begin with. This can make the attorney’s theft even more devastating. Some clients who suffer financial losses through the dishonest conduct of their attorneys often end up losing everything. Even when the attorney goes to prison for many years, the client may only find a small measure of satisfaction.

Clients can report the attorney’s theft to law enforcement in addition to taking steps to seek the attorney’s suspension or disbarment. Suspension and disbarment can stop the attorney from swindling other clients, and can support a civil claim for compensation later on. Reporting the matter to law enforcement officials can lead to the attorney’s arrest and criminal charges.

When the attorney is convicted of a crime involving theft from clients, the attorney is often ordered to make restitution to the clients. If the attorney has not spent all the money he stole, the balance of the money that can be located can be used to reimburse the clients. When these kinds of restitution orders are entered, the court may appoint a person to trace the funds the attorney stole, and ensure that the clients and other creditors are reimbursed.

However, the stolen money is often not enough to pay the clients back. Some attorneys who steal from clients do so in a manner resembling a Ponzi scheme. So the attorney steals from new clients to replace money stolen from older clients. By the time the attorney is arrested and charged, the money is mostly spent on high-end living expenses that cannot be liquidated to pay the clients. Most clients may only be able to receive cents on the dollar of the money they lost.

 

Client Security Fund

The state of Connecticut provides another way for clients to get reimbursed for certain financial losses clients experience in the course of an attorney-client relationship. The reimbursement is made through the Client Security Fund, which is funded by a fee from each registered attorney practicing law in Connecticut.

Under the Client Security Fund, clients can only recover for losses that result from the dishonest conduct of a Connecticut attorney who has died, been deemed incompetent or insane, been disbarred or suspended from the practice of law in Connecticut, been placed on inactive status by a Connecticut court, resigned from the Connecticut bar, or against whom a judgment has been obtained with respect to the dishonest conduct. There are additional limitations on recovery. For example, clients cannot recover for losses caused by malpractice or negligence. The attorney must have committed a dishonest act, which often implies fraud, misrepresentation, or a criminal act.

Unfortunately, the fund rarely offers a client full reimbursement for covered losses. This is especially true in situations where the client loses large amounts of money or property. The client may have to rely on the attorney’s malpractice insurance to cover the rest of the losses that are not reimbursable through either of the means discussed above.

 

Legal Malpractice Claim

If the attorney steals from a client, the client can also file a legal claim for malpractice. This would be helpful because the client can seek compensation for acts that would either not be considered criminal, or acts that lead to losses that would not be covered for compensation under the Client Security Fund or restitution ordered as part of a sentence. Legal malpractice can include things such as an attorney’s failure to communicate with clients, an attorney’s failure to file documents that results in losses for the client, gives bad legal advice, or engages in other misconduct.

To file a malpractice claim, the attorney’s actions or failure to act have to be evaluated to make a determination of whether the attorney was professionally negligent. Without a finding that the attorney acted in a manner that fell below a reasonable professional standard, recovery for legal malpractice may be difficult. Additionally, the client has to be careful to bring the malpractice action before the time for filing a claim expires. The client may not always be able to know when the claim arose, and may therefore not be able to know when the statute of limitations begins to run. This is why it is important for a client who suffers a loss from the conduct of an attorney to seek a consultation with a knowledgeable legal malpractice attorney as soon as possible to see if he has a possible claim.

 

Other Considerations

There are other actions that an attorney or former attorney can take that are not directly related to the practice of law. A dishonest attorney acting in a fiduciary role, as an executor of an estate, as power of attorney, or as a trustee, and who steals from these clients is not necessarily guilty of malpractice because he is not acting in his capacity as an attorney. For instance, attorneys who have been disbarred or suspended can still serve in these fiduciary capacities. When these attorneys steal from clients while in these roles, there are still other ways to seek compensation by filing a lawsuit.

 

Contact an Experienced Attorney

After you have suffered a financial loss because of the actions of your attorney, it may be difficult to trust another attorney to make things right. However, the legal malpractice attorneys at Stanger Stanfield Law, LLC are focused on helping those who have been harmed by attorney misconduct in Connecticut.

Bruce Stanger

My litigation experience includes family law, divorce, product liability, construction law, professional negligence, shareholder disputes, medical malpractice, legal malpractice, and general commercial litigation.