Rules and Bylaws

Rule XII. Clients' Security Trust Fund

Section 1. Creation of Trust Fund
There is hereby authorized and created a trust fund, to be known as the "Clients' Security Trust Fund of the District of Columbia Bar" (hereinafter referred to as "the Trust Fund").

Section 2. Administration of Trust Fund
The Trust Fund shall be operated and administered in accordance with these Rules by five trustees, appointed as hereinafter provided. The trustees shall be known as "Trustees of The Clients' Security Fund of the District of Columbia Bar."

Section 3. Purpose of Trust Fund
The purpose of the Trust Fund shall be to maintain the integrity and protect the good name of the legal profession by reimbursing, to the extent authorized by these rules and deemed proper and reasonable by the trustees, losses caused by dishonest conduct of members of the District of Columbia Bar, acting either as attorneys or as fiduciaries (except to the extent to which they are bonded).

Section 4. Trustees; Appointment and Term of
The Trustees shall be appointed by the court for terms as follows: One for 1 year, one for 2 years, one for 3 years, one for 4 years, and one for 5 years. After the initial appointments, each subsequent appointment shall be for a term of 5 years and no appointee who has served a full term of 5 years shall be eligible for reappointment to the committee until 1 year after the termination of his last term. Vacancies shall be filled by appointment by the Court for the unexpired term.

Section 5. Duties of Trustees
The Trustees shall be authorized, beginning not later than July 1, 1972, to consider claims for reimbursement of losses arising after the effective date of these rules and caused by the dishonest conduct of members of the District of Columbia Bar acting either as a lawyer or as a fiduciary in the matter in which the loss arose except to the extent to which they are bonded to the extent such losses are otherwise covered, provided such member has died, has been adjudicated a bankrupt, has been adjudicated mentally incompetent, has been disbarred or suspended from the practice of law, has voluntarily resigned from the practice of law, has become a judgment debtor of the applicant, or has been adjudged guilty of a crime which judgment or judgments shall been predicated upon the dishonest conduct of the lawyer, or where the claim has been certified to the Trustees by the Board of Governors of the District of Columbia Bar as an appropriate case for consideration because the loss was caused by the dishonest conduct of a member of the District of Columbia Bar. The Trustees may administer oaths and affirmations and, in accordance with Superior Court Civil Rule 45, may compel by subpoena the attendance of witnesses and the production of pertinent books, papers, and documents. Subpoenas issued during the course of an investigation shall indicate on their face that subpoenas are issued in connection with an investigation under this rule. The Superior Court may, upon application by the Trustees, enforce the attendance and testimony of any witnesses and the production of any documents so subpoenaed. Subpoena and witnesses fees and mileage shall be the same as those in the Superior Court. The Superior Court may hear and determine any challenge to the validity of a subpoena so issued. The Trustees shall be authorized and empowered to admit or reject such claims in whole or in part to the extent that funds are available to it, and the Trustees shall have complete discretion in determining the order and manner of payment of claims. All reimbursements shall be a matter of grace and not of right in the Clients' Security Trust Fund as third party beneficiary or otherwise. No attorney shall be compensated for prosecuting a claim against the Fund.

Section 6. Rules Governing Fund; Adoption of
The Trustees are authorized to adopt regulations not inconsistent herewith and subject to the approval of the Board of Governors of the District of Columbia Bar for the management of its funds and affairs, for the presentation of claims and the processing and payment thereof.

Section 7. Disbursement of Fund
All sums appropriated by the Board of Governors for the use of the Trustees shall be held by the Treasurer of the District of Columbia Bar in a separate account known as "Clients' Security Fund" subject to written direction of the Trustees under the regulations adopted by the Trustees.

Section 8. Uses of Fund
The Trustees may use or employ the Clients' Security Fund for any of the following purposes within the scope of the Trustees' objectives as heretofore outlined:
   (1) To make reimbursements on approved claims as herein provided to clients and members of the public;
   (2) To purchase insurance to cover such losses in whole or in part, provided that such insurance is obtainable at reasonable costs and is deemed appropriate and provided that the purchase of such insurance is approved by the Board of Governors of the District of Columbia Bar;
   (3) To invest such portions of the fund as may not needed currently to pay losses in United States Government Bonds or federally insured savings institutions located within the District of Columbia;
   (4) To deposit at interest in federally insured banks or savings institutions located in the District of Columbia; the interest or other income thereby received to be added to and automatically become a part of said Fund.

Section 9. Expenses of Trustees
The expenses of the Trustees shall be paid out of the general funds of the District of Columbia Bar.

Section 10. Reports of Trustees
The Trustees shall provide a full report of their activities at least yearly to the Board of Governors of the District of Columbia Bar and shall make such other report of their activities and give only such publicity to same as the Board of Governors may deem advisable.

Section 11. Removal of Trustee. Abolition of Fund
The court at any time may remove the Trustees and abolish the Trust Fund. In the event of such abolition, all assets of the Clients' Security Trust Fund shall be and remain the property of the District of Columbia Bar to be used for its general purposes as determined by the Board of Governors.

Section 12. Appropriations to Fund
The Board of Governors of the District of Columbia Bar shall be authorized in its discretion to make an appropriation to the Clients' Security Trust Fund in the amount of not less than $10,000.00 for the 1st year of operation and thereafter in such amounts as it may deem necessary and proper for each subsequent year.

Section 13. Payments From Fund
Payment shall be made from the fund only upon condition that the District of Columbia Bar receive a pro tanto assignment from the applicant of the applicant's rights against the lawyer involved, his personal representatives, his estate and assigns, on condition that the trust fund shall be entitled to reimbursement on such terms as the trustees may deem proper under the circumstances. Any sums collected by reason of such subrogation shall be for the sole benefit of the fund and applied thereto.

Section 14. Immunity
Claims submitted to the Clients' Security Fund shall be absolutely privileged, and no complaint or action predicated thereon may be instituted or maintained. The Trustees, staff and agents of the Clients' Security Fund shall be immune from civil liability and disciplinary complaint under this rule and from suit for any conduct in the course of their official duties.