Read the IOLTA update from the most recent Journal.
Combating Domestic Violence with Legal Services
Read the report regarding the Domestic Violence Victim Assistance Act 2013-14.
Legal Aid Economic Impact Study
A report from of the NC Equal Access to Justice Commission, A 108% Return on Investment: The Economic Impact to the State of North Carolina of Civil Legal Services in 2012, finds the work of legal services providers across the state generated $48,775,276 in economic impact in 2012. Impact includes (1) direct economic benefits received on behalf of clients for example, food stamps, supplemental security and social security disability, welfare assistance, and tax-related awards, (2) indirect economic impact felt by the state and local economies on account of direct benefits received, and (3) cost savings to the state and local economies due to the advocacy of providers in domestic violence, foreclosure, and eviction prevention. For more information, read the full report and executive summary.
Bank of America Settlement Directs Funds to Legal Aid
In August 2014, Bank of America reached a settlement with the US Department of Justice related to their mortgage practices. Of the more than $7 billion in consumer relief, the settlement includes at least $30 million for Interest on Lawyers' Trust Account (IOLTA) programs across the country. The terms of the settlement direct funds to be used for the provision of foreclosure prevention and community redevelopment legal services.
In April 2015, NC IOLTA received Bank of America settlement funds totaling $842,896.15. The funds come at a time when legal aid programs have experienced severe funding cuts from nearly every source. IOLTA income from lawyers' trust accounts in North Carolina has decreased by more than 50% over the past eight years from a high of $4.6 million in 2007. IOLTA income remains at a historic low.
With no significant cy pres funding directed to NC IOLTA in 2014 and 2015 thus far, the funds will help bridge the significant gap in available funding for 2016 grants. Cy pres and other court awards like the Bank of America settlement funds provide much-needed funding for legal aid programs facing increasing need and diminishing available resources.
Class Action Residuals Boost IOLTA Income
Though income from IOLTA accounts remains depressed due to low interest rates, NC IOLTA income is boosted by cy pres funds. Strategically positioned to serve the entire state, NC IOLTA is an ideal nexus for the simple and effective distribution of cy pres awards in North Carolina for civil legal services for low income residents. IOLTA works closely with local legal aid organizations and legal professionals to develop and fund statewide legal aid projects where help is needed most. Since 2007, NC IOLTA has received more than $2 million in cy pres.This includes:
· $1.2 million in residual funds directed to IOLTA programs across the country in a Washington State class action settlement. Residual funds are those funds remaining after exhaustive efforts are made to locate and distribute funds to class members following the collection of a class action judgment A large amount of residual funds resulted in this case involving blast fax advertising from the inability to locate class members because of the absence of good records, the passage of time since the case was initiated, and award limit per class members.
· $525,000 in residual funds arising out of class action lawsuits originally filed in 2004 in New Hanover County Superior Court to challenge the legality of payday lending in North Carolina. After settlement was reached in 2010, over $28 million was distributed to individual victims of payday lending. Just over $1 million in residual funds was split between NC IOLTA and the Indigent Person’s Attorney Fund in accordance with North Carolina’s cy pres statute, NCGen.Stat. §1-267.10.
· $130,000 from a class action case filed in Buncombe County in 2004. Because the class included a large number of difficult to identify consumers suffering only small monetary losses, the settlement provided for a cy pres distribution in lieu of a claims process. With court approval, the funds were distributed to regional charitable organizations, so the funds could be expended for the benefit of citizens in the settling five states. In NC the funds were divided equally among NC IOLTA at the NC State Bar (for civil legal aid), Pisgah Legal Services in Asheville, Habitat for Humanity, and IDS.
North Carolina has a statute that sets out a procedure for distributing class action residuals equally to the Indigent Person's Attorney Fund and the North Carolina State Bar. The State Bar has asked IOLTA to administer the funds it receives, which are for the provision of civil legal services for indigents. The Equal Access to Justice Commission (EAJC) has published a manual on Cy Pres and Other Court Awards to educate judges and attorneys as to the importance of such awards to legal aid organizations. The manual includes information on different types of court awards, tips for structuring award agreements, examples of awards, and a primer on how to structure a cy pres settlement. To learn more about civil legal assistance to the indigent, visit the NC Equal Access to Justice website.