The Massachusetts Clients' Security Board awarded a record $2.8
million last year to compensate clients whose lawyers defrauded
them. It is the largest collective award distributed by the board
since the Supreme Judicial Court established it in 1974 for the
purpose of awarding full restitution to clients whose in-state
attorneys misappropriated their money or property.
During fiscal year 2013, which ran from Sept. 1, 2012, until Aug.
31, 2013, the board adjudicated 83 of the 108 claims it received,
resulting in 69 awards issued.
"The Massachusetts legal community is a leader in the area of
client protection. The commonwealth is unique in that attorneys
self-fund a system to fully compensate all victims for those rare
but unfortunate cases of attorney theft," said Massachusetts Bar
Association Chief Legal Counsel Martin W. Healy. "Overall, the vast
majority of practitioners are dedicated professionals interested in
fully safeguarding their clients' interests."
Forty attorneys were disciplined in 2013, down from 43 in 2012 and
46 in 2010. Those 40 represent just .07 percent of the 57,168
members of the Massachusetts bar.
Of the total award in terms of dollars, just more than 78 percent
of defalcations were the result of five attorneys: Phillip M.
Thompson of Lowell, $775,564.60; Michael J. Conley of Marblehead,
$770,000.00; Daniel S. Braese of North Andover, $269,647.56; Martin
J. Gately of Malden, $227,874.24; and Patrick J. McDonough of
Waltham, $151,000.00. Together, these attorneys were responsible
for $2,194,086.41, which is more than $135,000 greater than all the
awards in 2011 combined.
For the first time ever, two lawyers were responsible for awards
greater than $750,000. This surpassed the previous high in 2005
when two lawyers accounted for more than $500,000. The smallest
claim awarded was $750.
Assistant Clients' Security Board Counsel Karen D. O'Toole said
the amount of money, and the money itself, isn't all that matters.
For the victims, peace of mind and restored faith in the legal
system often accompany the monetary award.
"I received a call the other day from a woman who is receiving
$3,000, and she is just so thankful and so happy to have some money
to go into winter with," O'Toole said.
She said victims often have long-term attorney-client
relationships with the lawyers who defraud them, so "in addition to
being shocked, angry and devastated … they lose faith in lawyers.
But when they come to us, they find themselves again dealing with
lawyers, but are much happier with the experience."
Real estate tops list
The record total award in 2013 coincided with real estate leaping
ahead of trusts and estates as the category most responsible for
awards given. Real estate transactions accounted for more than
$1.27 million in awards, just under half of the total amount
dispersed.
While concerns about abuses as a result of mortgage foreclosures
exist, the recent jump seemed to be the result of the bad acts of
just a few attorneys, said Clients' Security Board Chair Michelle
Porter.
Porter also addressed the relatively consistent number of
attorneys that are responsible for defalcations. "Year after year
we find ourselves dealing with around the same number of attorneys,
and around the same amount awarded," she said. This makes it
difficult to try to assess trends from year to year, or predict
what the next year or five years down the road will look
like.
One constant however is the board's ability to make victims whole
- both financially and sometimes emotionally.
"The board goes a long way in terms of restoring faith in the
profession in those who have been wronged," said Porter. Because
while a miniscule fraction of attorneys can fundamentally alter
someone's life for the worse, the good work of attorneys at the
board help these victims get what they deserve and help the image
of lawyers along the way.