A state program that reimburses clients for money stolen by their lawyers has fielded a record 325 claims this year, straining its $618,000 budget and raising the possibility that for the second straight year, some victims will not be paid in full.

The increased demand on the state's client protection fund is due to higher caps on awards, which took effect last year, and a sharp rise in the number of claims filed, said James Grogan, chief counsel of the state Attorney Registration and Disciplinary Commission, which administers the fund.

"More people are getting helped," Grogan said. But "there are limits right now in terms of economics. ... It's a very busy program."

The commission is set to meet Dec. 10 to determine how many of the claims are valid and whether victims will have to accept discounted payments.

Last year, for the first time, the fund was forced to discount awards, giving some victims 88 cents on the dollar, Grogan said.

One of the victims was Rodney Christo of South Chicago Heights. In 2002 an attorney handling Christo's real estate closing committed suicide, and money that Christo and other clients had entrusted to him was revealed to be missing.

Staff at the lawyer's office directed Christo to the commission, where he learned of the client protection program. Christo said he wasn't paid in full, partly because of the cap on claims against one attorney. But last year, the fund paid him 75 percent to 80 percent of his claim--about $2,700, Christo estimated.

"I was very satisfied overall," Christo said. "I didn't think I was going to get anything."

The fund struggled to make ends meet last year, when it got 208 claims. The commission ruled on 151 claims, approved 70 and paid out $500,000. That payout was up from $216,000 in 2002 and $257,000 in 2001.

"We're seeing more conflict-of-interest issues, and conversion [of client funds] is a big problem," Grogan said.

In addition, payouts have increased since April 2003, when the state raised the limit on awards from $10,000 to $25,000 per claim. At the same time, the state raised the cap for total claims against one attorney from $100,000 to $250,000.

All states have some type of protection program, which pays clients in cases where lawyers have stolen money or accepted legal fees without doing any work. The funds aren't intended for clients whose lawyers have been negligent or committed legal malpractice.

In Illinois, clients seek reimbursement from the disciplinary commission, which uses money from lawyers' annual registration fees--$229 a year for most lawyers. The commission can then try to recoup the money by bringing a civil suit against the lawyer, but the perpetrator is often broke or in bankruptcy, Grogan said.

Clients normally must file claims within three years of when they discover the theft or within one year of the time the board disciplines their lawyer.

Consumer activists have criticized client protection programs in Illinois and elsewhere, decrying caps on awards and arguing that state officials don't do enough to publicize them.

"We hear every day from legal consumers who have attempted to sue their lawyer for malpractice and have found the lawyer is insolvent," said Suzanne Mishkin, associate counsel at HALT--An Organization of Americans for Legal Reform. "When we inform them about client compensation funds in their state, this is the first they've heard of it."

In Illinois, the commission's staff informs clients about the fund when they file complaints about lawyers that involve theft or other eligible misconduct, Grogan said. He said clients can also learn about the program on the commission's Web site.

Mishkin said Illinois deserved credit for raising its cap, but it still trailed other large states such as Florida, which has a $50,000 cap, and Texas, which has a $30,000 cap. Massachusetts has no cap on awards.

Illinois' new cap of $25,000 per claim is still only one-half of the national median, commission officials said.

The commission can ask the state Supreme Court to raise the registration fee, but it does so sparingly, Grogan said. He said the commission has said the fee is sufficient, at least until 2006.

Robert Welden, who also chairs the American Bar Association's Standing Committee on Client Protection, said the committee is set to meet in June in Chicago, where the agenda will include workshops to help program administrators better publicize the funds.