Rule 514. Reimbursable losses.

 (a)  General rule. For the purposes of this subchapter, reimbursable losses consist of those losses of money, property or other things of value which meet all of the following requirements:

   (1)  The loss was caused by the Dishonest Conduct of a Covered Attorney when acting:

     (i)   as an attorney-at-law;

     (ii)   in a fiduciary capacity customary to the practice of law, such as administrator, executor, trustee of an express trust, guardian or conservator;

     (iii)   as an escrow agent or other fiduciary, having been designated as such by a client in the matter in which the loss arose or having been so selected as a result of a client-attorney relationship.

   (2)  The loss was that of money, property or other things of value which came into the hands of the Covered Attorney by reason of having acted in the capacity described in paragraph (1) of this subdivision. Consequential or inci- dental damages, such as lost interest, or attorney fees or other costs incurred in seeking recovery of a loss, may not be considered in determining the Reimbursable Loss.

   (3)  The loss, or the reimbursable portion thereof, was not covered by any insurance or by any fidelity or similar bond or fund, whether of the Covered Attorney, or the Claimant or otherwise.

   (4)  The loss was not incurred by:

     (i)   the spouse or other close relative, partner, associate, employer or employee of the Covered Attorney, or a business entity controlled by the Covered Attorney, or any entity controlled by any of the foregoing;

     (ii)   an insurer, surety or bonding agency or company, or any entity controlled by any of the foregoing;

     (iii)   any government unit;

     (iv)   any financial institution that may recover under a ‘‘banker’s blanket bond’’ or similar commonly available insurance or surety contract;

     (v)   a business organization having twenty or more employees; or

     (vi)   an individual or business entity suffering a loss arising from personal or business investments not arising in the course of the client-attorney relationship.

   (5)  In cases of extreme hardship or special and unusual circumstances, and subject to the provisions of paragraph (b), the Board may, in its discretion, and consistent with the purpose of the Fund, recognize a claim which would otherwise be excluded under this subchapter.

   (6)  In cases where it appears that there will be unjust enrichment, or the Claimant unreasonably or knowingly contributed to the loss, the Board may, in its discretion, deny the claim.

   (7)  A payment from the Fund, by way of subrogation or otherwise, will not benefit any entity specified in paragraph (4) of this subdivision.

 (b)  Maximum recovery. The maximum amount which may be disbursed from the Fund to any one Claimant with respect to the Dishonest Conduct of any one Covered Attorney shall be $100,000. The maximum amount which may be disbursed from the Fund as a result of any one Covered Attorney shall be $1,000,000. The Board may request the Supreme Court of Pennsylvania to exceed the $1,000,000 maximum when the Board determines, in the exercise of its discretion, that exceeding the maximum is necessary to adequately compensate all victims of the Dishonest Conduct of the Covered Attorney and exceeding the maximum will not unduly burden the Fund.

 (c)  No lawyer shall accept payment for assisting a Claimant with the filing of a claim with the Fund, unless such payment has been approved by the Board.


   The provisions of this Rule 514 amended December 18, 1987, effective July 1, 1988, 18 Pa.B. 180; amended February 24, 2000, effective July 1, 2000, 30 Pa.B. 1357; amended June 29, 2007, effective September 4, 2007, 37 Pa.B. 3218; amended November 30, 2010, effective in thirty days, 40 Pa.B. 7207; amended January 24, 2014, effective in 30 days, 44 Pa.B. 768. Immediately preceding text appears at serial pages (354842) to (354843).

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