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.


Class Action Residuals Boost IOLTA Income for 2012 and 2013
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.

Over $650,000 in cy pres funds to date in 2013
In September we received over $525,000 from residual funds arising out of class action lawsuits originally filed in 2004 in the 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.

In February 2013 we received almost $130,000 in cy pres funds from Asheville law firm Wimer & Associates 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.

Over $1M in class action residuals in 2012
In June 2012 we received $1.2 million from residual funds directed to IOLTA programs across the country in a Washington State class action case. 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.

A Washington Court Rule directs a minimum of 25% of class action residual funds to their IOLTA program and 75% by court order to other appropriate organizations. In this case, the remaining 75% of residual funds were distributed to IOLTA programs in all states and the District of Columbia on a pro rata basis using an estimate of the statutorily prohibited activity that occurred in each state. The court found that these entities promote access to the civil legal justice system, something that members of the certified class, who have claims under consumer protection and other laws, desire and need. 

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.


IOLTA Update
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 2012-13.