Reform Federal Civil Justice Policy to Meet the High-Stakes Legal Needs of Low-Income People

Voters called for a different approach to national policy. With the New Year, it is time for Congress to make that new approach happen....

January 5, 2007

By Laura K. Abel & David Pedulla

*Cross-posted from TortDeform.com 

In November, the voters called for a different approach to national
policy. With the New Year, it is time for Congress to make that new
approach happen. These are some policy reforms that would help fix one
fundamentally flawed aspect of our government – the inability of
low-income people with pressing civil legal needs to get a fair day in
court.

1. Allocate more funding to the Legal Services Corporation.

Every county of every state is served by civil legal aid lawyers
receiving federal funding through the Legal Services Corporation
(“LSC”). Those lawyers provide representation in cases regarding the
daily, crucial legal needs of low-income people, in matters such as
child custody, evictions, and subsistence-level public benefits.
Repeated studies show that about 80% of those legal needs go unmet
because LSC lacks adequate funding. Pro bono and other palliative
measures are unable to fill the gap. The minimum Congress should
allocate is $411 million – the amount called for by LSC and the
American Bar Association. Even that amount will leave many dire legal
needs unmet, but it will be an improvement over the current LSC funding
level of $330 million.

2. Ensure that Interest on Lawyers’ Trust Accounts accrue the same level of interest as other bank accounts.
Interest on Lawyers’ Trust Accounts (“IOLTA”) – a program in which
attorneys bundle client funds in order to generate interest revenue
where no interest would otherwise be generated – is one of the nation’s
largest funding sources for civil legal aid. Unfortunately, banks
sometimes pay less interest on IOLTA accounts than they do on other
similar bank accounts. Congress should follow the practice of many
state legislatures and state court systems by instituting banking
reforms to require banks to pay interest at the same rate on IOLTA
accounts as they do on comparable accounts.

3. Remove the LSC “physical separation requirement.”

A holdover policy from the Gingrich-era Congress requires civil legal
aid programs receiving LSC funds to waste their scarce resources by
establishing two different offices if they want to use their non-LSC
funds free of cumbersome restrictions. The restrictions bar the
programs from representing clients in class action lawsuits, claiming
court-ordered attorneys’ fee awards to strengthen clients’ cases, and
representing many categories of immigrants, among other activities.
Congress should remove the wasteful physical separation requirement to
allow civil legal aid lawyers to help their clients in the most
efficient and effective manner.

4. Examine whether the LSC Inspector General is overstepping
his mandate by interfering with the ability of civil legal aid programs
to serve their clients.

Civil legal aid programs receiving LSC funding recently have come under
attack by LSC’s Inspector General (“IG”). The IG claims to be trying to
ensure that impact work does not interfere with civil legal aid
programs’ ability to meet the basic needs of low-income clients. Our
fear is that the IG’s investigations themselves are interfering with
the ability of civil legal aid lawyers to meet the needs of their
client communities in the most efficient and effective manner. Congress
must investigate whether this is the case.

5. Reform the Bankruptcy Act.
In 2005, Congress enacted sweeping changes in the bankruptcy laws. One
change that went too far was the imposition of personal liability on
lawyers representing clients in bankruptcy proceedings. This reform has
scared countless lawyers in public interest organizations and in
private practice away from representing clients seeking bankruptcy
protection. Congress must roll back this provision to increase
financial protection for low-income people and to ensure that the
bankruptcy system can benefit from the participation of lawyers skilled
at counseling and representing clients.

6. Fund student loan forgiveness programs for civil legal aid lawyers.
Another reason low-income people have a hard time finding high-quality
legal representation is that few recent law school graduates can afford
to take public interest jobs. A recent study
found that more than 80% of law students borrow money to pay for law
school, with an average loan burden of $78,763 for students attending
private schools. For these students, taking a legal aid job paying an
average of $35,000 is not an option. Congress should expand a pilot
program operated by the Legal Services Corporation, which helps civil
legal aid attorneys repay their loans.

7. Pass legislation similar to the Civil Rights Act of 2004 (the FAIRNESS Act).
Over the course of the past decade, the federal courts have stripped
themselves of the ability to enforce many important civil rights
protections. The result is that people suffering discrimination often
find that they have no way to enforce their rights. The FAIRNESS Act
would restore access to the courts for seniors seeking to challenge age
discrimination, for immigrants seeking to enforce their language access
rights, and for many others seeking fair treatment under the law.