Section 2 - Reimbursable Losses

As amended through June 11, 2024

2.1 A loss of money or other property of a lawyer's client is eligible for reimbursement if:

2.1.1 The claim is made by the injured client or the client's conservator, personal representative, guardian ad litem, trustee, or attorney in fact.

2.1.2 The loss was caused by the lawyer's dishonest conduct. For purposes of this rule, dishonest conduct includes:

(i) a lawyer's willful act against a client's interest by defalcation, embezzlement, or other wrongful taking;

(ii) a lawyer's misrepresentation or false promise to provide legal services to a client in exchange for the advance payment of a legal fee; or,

(iii) a lawyer's wrongful failure to maintain the advance payment in a lawyer trust account until earned. A lawyer's failure to perform or complete a legal engagement does not constitute, in itself, evidence of misrepresentation, false promise, or dishonest conduct.

2.1.3 The loss is not covered by any similar fund in another state or jurisdiction, or by a bond, surety agreement or insurance contract, including losses to which any bonding agent, surety or insurer is subrogated.

2.1.4 The loss is not incurred by a financial institution covered by a "banker's blanket bond" or similar insurance or surety contract.

2.1.5 The loss arose from, and was because of:

(i) an established lawyer-client relationship; or,

(ii) the failure to account for money or property entrusted to the lawyer in connection with the lawyer's practice of law or while acting as a fiduciary in a matter related to the lawyer's practice of law.

2.1.6 As a result of the dishonest conduct, either:

(i) the lawyer was found guilty of a crime;

(ii) a civil judgment was entered against the lawyer, which remains unsatisfied;

(iii) the claimant holds an allowed claim against the lawyer's probate or bankruptcy estate, which remains unsatisfied; or

(iv) in the case of a claimed loss of $5,000 or less, the lawyer was disbarred, suspended, or reprimanded in disciplinary proceedings, or the lawyer resigned from the Bar.

2.1.7 A good faith effort has been made by the claimant to collect the amount claimed, to no avail.

2.1.8 The statement of claim was filed with the Bar within two years after the latest of the following:

(i) the date of the lawyer's conviction; or

(ii) in the case of a claim of loss of $5,000 or less, the date of the lawyer's disbarment, suspension, reprimand or resignation from the Bar; or

(iii) the date a judgment is obtained against the lawyer, or

(iv) the date the claimant knew or should have known, in the exercise of reasonable diligence, of the loss. In no event may the Committee approve a claim for reimbursement if the statement of claim is submitted more than six years after the date of the loss.

2.1.9 The loss arose from the lawyer's practice of law in Oregon. In determining whether the loss arose from the lawyer's practice of law in Oregon, the Committee may consider all relevant factors including the parties' domiciles, the location of the lawyer's office, the location where the attorney-client relationship was formed, and the location where legal services were rendered.

2.2 Reimbursement of a legal fee will be allowed only if:

(i) the lawyer provided no legal services to the client in the engagement; or

(ii) the legal services that the lawyer actually provided were, in the Committee's judgment, minimal or insignificant; or

(iii) the claim is supported by a determination of a court, a fee arbitration panel, or an accounting or other evidence acceptable to the Committee that establishes that the client is owed a refund of a legal fee. No award reimbursing a legal fee may exceed the actual fee that the client paid the lawyer.

2.3 In the event that a client is provided equivalent legal services by another attorney without cost to the client, the legal fee paid to the predecessor lawyer will not be eligible for reimbursement, except in extraordinary circumstances.

2.4 A claim approved by the Committee may not include attorney's fees, interest on a judgment, prejudgment interest, any reimbursement of expenses of a claimant in attempting to make a recovery, or prevailing party costs authorized by statute, except that a claim may include the claimant's actual expense incurred for court costs, as awarded by the court.

2.5 Members of the Bar are encouraged to assist claimants without charge in preparing and presenting a claim to the Fund. Nevertheless, a member of the Bar may contract with a claimant for a reasonable attorney fee, which contract must be disclosed to the Committee at the time the claim is filed or as soon thereafter as an attorney has been retained. The Committee may disapprove an attorney fee that it finds to be unreasonable. No attorney shall charge a fee in excess of the amount the Committee has determined to be reasonable, and the attorney fee shall be paid from, and not in addition to the award. In determining a reasonable fee, the Committee may refer to factors set out in ORS 20.075.

2.6 In cases of extreme hardship or special and unusual circumstances, the Committee may approve or recommend for payment a claim that would otherwise be denied due to noncompliance with one or more of the provisions in Section 2 of these rules.

Revised Effective 1/1/2022.