Section 503. Pennsylvania Lawyers Fund for Client Security Board

(a) General rule. The Supreme Court shall appoint a board to be known as the ‘‘Pennsylvania Lawyers Fund for Client Security Board’’ which shall consist of five members of the bar of this Commonwealth and two non-lawyer public members. One of the members shall be designated by the Court as Chair and another as Vice-Chair. A majority of the members of the Board shall designate a member of the Board to act as Treasurer.

(b) Terms; manner of action. The regular terms of members of the Board shall be for three years, and no member shall serve for more than two consecutive three-year terms. The terms of one-third of the members of the Board, as nearly as may be, shall expire in each year. The terms of members shall commence on April 1. The Board shall act with the concurrence of not less than a majority of the members in office. A majority of the members in office shall constitute a quorum.

(c) Vacancies. Vacancies shall be filled by appointment by the Supreme Court for any unexpired terms.

(d) Powers. The Board shall have the power and duty:

(1) To appoint hearing committees. Each committee shall consist of three members who are members of the bar of the Supreme Court or who are current members of the Board.

(2) To investigate applications by Claimants for disbursements from the Fund.

(3) To authorize disbursements from the Fund and to fix the amount thereof.

(4) To determine in January of each year, and to report to the Supreme Court, whether the Fund is of sufficient amount to pay adjudicated claims and other anticipated claims.

(5) To adopt rules of procedure not inconsistent with these rules. Such rules may provide for the delegation to the Chair or the Vice Chair of the power to act for the Board on administrative and procedural matters.

(6) To exercise the powers and perform the duties vested in and imposed upon the Board by the Supreme Court.

(7) With prior approval of the Supreme Court to give financial assistance to Pennsylvania non-profit corporations whose purpose it is to assist alcohol or drug impaired Pennsylvania lawyers and judges to regain their health and to restore them to professional competence, or to such other Supreme Court Committees or Boards as the Court may direct.

(8) To prudently invest, per the direction of the Investment Advisory Board or the Court, such portions of the funds as may not be needed currently to pay losses, and to maintain sufficient reserves as appropriate.

(9) To prosecute claims for restitution to which the Fund is entitled.

(e) Compensation; expenses. Members of the Board shall serve without compensation but shall be reimbursed for their actual and necessary expenses incurred in the discharge of their duties.

(f) Conflict of interest:

(1) A member of the Board who has or has had a client-attorney relationship or a financial relationship with a Claimant or a Covered Attorney shall not participate in the investigation or adjudication of a claim involving that Claimant or Covered Attorney;

(2) A member of the Board who has or has had a relationship, other than as provided in subparagraph (1) above, with a Claimant or Covered Attorney, or who has other potential conflicts of interest, shall disclose such relationship to the Board and, if the Board deems appropriate, that Board member shall not participate in the investigation or adjudication of a claim involving that Claimant or Covered Attorney;

(3) Claims based upon alleged Dishonest Conduct by members of the Board shall be submitted directly to the Supreme Court. Claims based upon alleged dishonest conduct by Counsel to the Board or Staff shall be submitted directly to the Board for disposition.

(g) Immunity. Members of the Board, members of hearing committees, Counsel to the Board and Staff shall be immune from civil suit for any conduct in the course of their official duties. All communications to the Board, a hearing committee, Counsel to the Board or Staff relating to Dishonest Conduct by a Covered Attorney and all testimony given in a proceeding conducted pursuant to this subchapter shall be absolutely privileged and the person making the communication or giving the testimony shall be immune from civil suit based upon such communication or testimony, except that such immunity shall not extend to any action that violates Rule 402 or Rule 504 (relating to confidentiality).

Official Note

The provisions of subdivision (g) of the Rule recognize that the submission and receipt of applications by Claimants for disbursements from the Fund, and investigation, hearing, decision and disposition of such claims, are all parts of a judicial proceeding conducted pursuant to the inherent power of the Supreme Court of Pennsylvania. The immunity from civil suit recognized to exist in subsection (g) is that which exists for all participants in judicial proceedings under Pennsylvania law, so long as their statements and actions are pertinent, material and during the regular course of a proceeding. Communications made or revealed in violation of the confidentiality requirements of Rules 402 and 504 are not pertinent to the proceeding and, thus, do not entitle the person who publishes them to absolute immunity.

The provisions of this Rule 503 amended November 1, 1991, effective November 1, 1991, 21 Pa.B. 5405; amended March 11, 1993, effective May 22, 1993, 23 Pa.B. 2440; amended August 19, 1993, effective September 4, 1993, 23 Pa.B. 4204; amended May 8, 1997, effective immediately, 27 Pa.B. 2532; amended June 29, 2007, effective September 4, 2007, 37 Pa.B. 3218. Immediately preceding text appears at serial pages (318521) to (318522).