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By PORAC | January 10, 2010 | Posted in PORAC LDF News

Stability and AffordabilityStability and Affordability

Posted by Andy Schlenker

Each and every member of the PORAC Legal Defense Fund enjoys one principle benefit. All of us are assured that should the unfortunate circumstance arise, and we are legally “called on the carpet”, an aggressive legal defense will be mounted, maintained and pursued. The Board of Trustees always ensures that this promise of a “no cap” aggressive legal defense is afforded to each of our members when the need arises.

The Board of Trustees also remains mindful of the costs to be paid by the membership. Continually, we balance the need for a strong, stable, secure pool of liquid assets, against the monthly cost to our members. Your non-profit Legal Defense Fund continually strives to provide its members with the best defense for the lowest possible cost. Accordingly, despite numerous factors, there has not been an overall rate increase for a number of years.

However, in very recent times, our members have been challenged on several legal fronts. The number of criminal charges levied against our membership has more than doubled, and as a result, scores of our decent, hardworking members have found themselves in that rather uncomfortable position of being a criminal defendant. Additionally, during this unprecedented and challenging financial time, many departments seem to be using the disciplinary process as a means of trimming their staff. Now, terminations are being proposed for incidents which previously would have warranted a simple counseling. Consequently, the financial challenges to the Legal Defense Fund have tipped the scales, requiring us to impose a necessary base rate increase, across the board, for all member associations.

Sensitive to the need for fairness, the Legal Defense Fund has been designed to adjust the fees per association, depending upon the usage by that association’s membership. A balance was created to increase the rates for those associations who tend to use the fund more than others, against the importance of keeping LDF affordable to all. To do this, long ago, we established a maximum monthly rate. This way, a group that finds itself drawing substantially on the fund can still keep its LDF costs at a reasonable level. However, in a recent review, we noted that there are several associations which have been at the maximum rate for many years. The Board of Trustees recognizes this potential unfairness to the other associations and has begun to take action on this issue as well.

At our next meeting, the Trustees will be reviewing our “high user policy.” Some years ago, during similar financial times, this policy was put into effect to more fairly balance the costs. Essentially, it allows the Board of Trustees to take action and individually raise the rates of a repeatedly high-using member association. The policy also requires the Fund to remind the associations of the various methods of cost containment, through education and better coordination with their panel attorneys.

Stability, fairness, and affordability are the cornerstone principles of LDF. Your Board of Trustees promises to be vigilant in its quest to continually balance each of these important characteristics, and to make an effort to keep rate increases reasonable. However, please take into consideration when preparing your budgets for 2010 that a small base rate increase, across the board, is inevitable and will be coming. Once our financial advisors assist us with determining what that amount is, we will be sure to let you know.