California Client Fund Paid $1.1 Million to Girardi Claimants

The California State Bar’s client security fund has paid more than $1.1 million to people claiming they were victimized by now-disbarred plaintiffs’ lawyer Thomas Girardi.

To date, 33 applications have been processed, each of which can have multiple recipients, bar spokesman Rick Coca said. Sixteen applications are pending seeking an additional $1.48 million.

The fund as of Sept. 30 contained $8.9 million, according to numbers provided by the bar. Last year the agency reimbursed $5.66 million to 291 victims of attorney misconduct.

“We cannot yet project a total for 2022, but as of the end of September 2022 we’ve paid close to $2.4 million,” Coca said Friday.

The bar, after settling a Los Angeles Times lawsuit seeking the records of complaints against Girardi, disclosed that 205 closed complaints were made against the celebrity lawyer over four decades. Of those, 120 claims were related to client trust fund theft.

Even before Girardi was disbarred in June, the fund began making payments to his victims on an accelerated basis, bar Board Chairman Ruben Duran said in an open letter Thursday.

California active licensed lawyers pay a $40 annual fee on top of the base fee, set this year at $395, to feed the fund. Inactive attorneys pay $10. The state has 285,196 lawyers, including 195,571 active attorneys and 70,096 inactive, according to the bar’s most recent statistics.

Clients can be reimbursed up to $100,000 for a loss caused by their attorneys. Those losses include theft of settlement or other funds, failure to refund fees when a lawyer performs no services, borrowing money without intent or ability to repay, or obtaining money for property saying it would be used for an investment when none is made.

Whatever dent the Girardi mess makes in the client security fund is overshadowed by the mortgage meltdown in the early part of the century. The bar instigated nearly 2,000 disciplinary cases against attorneys charged in loan modification schemes. The client security fund in 2009-13 paid about $18 million on reimbursement applications related to lawyer-involved mortgage fraud, the bar said in 2016.

Senate Judiciary Committee Chairman Thomas Umberg (D) said that when they return in January lawmakers will ask the bar for additional information on repeat offenders, “what the bar has done in terms of making sure that those who are victims are kept informed of the process, and what’s happened to their complaints.”

Umberg on Thursday said there was no stomach in the legislature or profession for increased fees.

Starting Dec. 1 lawyers must annually register client trust accounts under the Girardi-prompted client trust account protection program. The state supreme court approved the program last month.