Lawyers Fund for Client Compensation Committee April 28, Report to Convocation

Transcription

1 Lawyers Fund for Client Compensation Committee April 28, 2005 Report to Convocation Committee Members: Robert C. Topp (Chair) Bradley H. Wright (Vice-Chair) Gordon Z. Bobesich Andrew F. Coffey Abraham Feinstein Richard L. J. Filion Laura L. Legge Purpose of Report: Information Prepared by the Lawyers Fund for Client Compensation

2 THE REPORT 1. The Lawyers Fund for Client Compensation Committee ( the Committee ) met on March 4, Committee members in attendance were Robert Topp (Chair), Bradley Wright (Vice-Chair), Andrew Coffey, Abraham Feinstein and Laura Legge. Staff and others in attendance were Zeynep Onen (Director, Professional Regulation), Maria Loukidelis (Manager, Lawyers Fund for Client Compensation), Dan Abrahams (Professional Regulation Counsel and former Acting Manager), Fred Grady (Manager of Finance) and Craig Allen (LawPRO VP and Actuary). 2. As a result of its meeting, the Committee is reporting on the following matters: (A) ADMINISTRATION & POLICY i) Fund s performance The Committee discussed the Fund s performance in 2004 and anticipated position in The Committee sought and received assurances that the Fund s balance is sufficient to cover claims equivalent to the worst experiences in recent history. The Committee considered materials prepared by Craig Allen, LawPRO s Vice-President and Actuary, and requested certain revisions. Revised materials are attached as Appendix A. (B) INFORMATION i) Grants Paid The Committee wishes to report that, since its last Report to Convocation, grants have been paid from the Fund in the amounts shown. (Only members whose discipline proceedings are completed or who are deceased are identified by name.) The Committee also wishes to express its appreciation to the members of the Review Subcommittee (Mr. Feinstein and Dr. Filion, as well as Mr. Topp who serves in case of a tie) for their ongoing diligence, commitment and hard work in reviewing grant recommendations. 2

3 Member (Status if Disciplined) Number of Claimants Total Grants Paid Clarke, Rudolph E. (Disbarred March 2003) 1 $ 5, Cooney, Roger Patrick Peter (Disbarred October 1 $ 15, ) Ehrlich, Stanley Charles (Suspended Jan mths) 1 $ 1, Fingold, Lee Edward (Disbarred January 1996) 1 $ 12, Gahan, Jeffrey Mark (Disbarred June 2004) 2 $ 5, Howard, Graham Irwin (Disbarred May 2003) 2 $ 4, Lewis, Donald Comstock (Disbarred October 2004) 4 $ 76, Pollitt, George Thomas (Permitted to Resign Sept 04) 1 $ 5, Steinberg, Sheldon Howard (Disbarred Nov. 2003) 10 $ 211, Stoner, Keith Gordon (Permitted to Resign June 2004) 1 $ 9, Tran, Eric Gregory (Disbarred April 2003) 3 $ 9, Zito, Giuseppe (Disbarred November 1998) 1 $ 50, Solicitor #75 (Suspended December 2001) 1 $ Solicitor #99 (Suspended October 2002) 7 $ 515, Solicitor #120 (Pending Discipline January 2004) 4 $ 35, Solicitor #121 (Suspended August 2002) 1 $ 18, Solicitor #125 (Sole Practitioner October 2004) 1 $ 25, Solicitor #128 (Suspended October 2003) 14 $ 503, Solicitor #129 (Suspended December 2003) 1 $ Solicitor #131 (Suspended February 2005) 1 $ 5, Solicitor #133 (Suspended October 2004) 2 $ 20, Solicitor #134 (Suspended October 2004) 8 $ 229, Solicitor #135 (Pending Trusteeship February 2005) 1 $ 12, Solicitor #136 (Suspended October 2004) 3 $ 224, Solicitor #140 (Suspended October 2003) 1 $ 1, TOTAL 73 $1,998,

4 APPENDIX A LAWYERS' PROFESSIONAL INDEMNITY COMPANY MEMORANDUM TO: FROM: CC: LAW SOCIETY OF UPPER CANADA CRAIG ALLEN MICHELLE STROM DATE: MARCH 10, 2005 RE: UNPAID CLAIMS LIABILITY, DECEMBER 31, 2004, LAWYERS FUND FOR CLIENT COMPENSATION The unpaid claims liability, as at December 31, 2004 for the Lawyers Fund for Client Compensation, is estimated to be $9,040,000. This amount is discounted for the time value of money (in the amount of $410,000), includes a provision for internal claims handling expenses (in the amount of $2,610,000), and includes a margin to provide for unfavourable developments as claims proceed toward resolution (in the amount of $970,000). The December 2004 unpaid claims liability is below that at December 31, 2003, which was set at $9,854,000. The primary explanation for this decrease is favourable development on older claims. Claims payments during the year roughly equal the cost of newly reported claims. On a nominal basis (i.e. without discounting and without a margin for unfavourable developments), the liability at December 31, 2004 is $8,481,000, which compares to a nominal liability of $9,281,000 at December 31, The following table summarizes the individual items that account for the carrying forward of the December 31, 2003 nominal claims liability through to December 31, 2004: 4

5 Claims Internal Costs Total Claims Liability at December 31, 2003 $6,161,000 $3,120,000 $9,281,000 Add: Adverse (Favourable) Development on (364,000) (117,000) (481,000) Claims Reported before December 31, 2003 Claims Liability at December 31, 2003 with Benefit 5,797,000 3,003,000 8,800,000 of Hindsight Add: Claims Incurred in Jan.- Dec ,966,000 1,228,000 3,194,000 Less: Payments Made in Jan.- Dec ,025,000 1,488,000 3,513,000 Claims Liability at Dec. 31, ,738,000 2,743,000 8,481,000 Fund Balance The Fund Balance as at December 31, 2004 is $19.5 million, up from $17.5 million at December Two items account for the bulk of this increase. The first is claims for the year, net of favourable development on prior-year claims. This value at $1,602,000 is $1.4 million below budget. The other is investment income, which is roughly $460,000 greater than budgeted, due to realized capital gains. 5