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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…

  • Laura Klein Abel
January 5, 2007

By Laura K. Abel & David Pedulla

*Cross-posted from 

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.