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Posted by: Stacey Shrader Joslin on Dec 19, 2008

Supreme Court seeks comments on proposal to raise legal aid funds

NASHVILLE, Dec. 19, 2008 — Needy Tennessee clients who are unable to afford lawyers to address their civil legal problems could receive new assistance under a proposal made by the Tennessee Bar Association, Tennessee Bar Foundation, Tennessee Association for Justice and Tennessee Alliance for Legal Services. The state Supreme Court yesterday released the proposal for public comment.

The proposal, submitted to the court in late November, would require all lawyers to place client funds that cannot earn interest, because they are either too small or expected to be held for a short duration, into accounts that pay interest to legal aid and pro bono programs for the poor. The program, known as the Interest on Lawyer Trust Accounts (IOLTA), is voluntary at present. The other new feature proposed by the groups is a requirement that banks pay comparable terms and interest on IOLTA accounts that they do on other similar accounts.

“These changes offer a way for the bar to address the huge and growing need for lawyers for the poor,” TBA President Buck Lewis said. “At a time when mortgage foreclosures and job losses are putting more pressure on Tennessee families, we may have an opportunity to step up their access to our justice system.”

The court has requested comments on the proposal through Feb. 20. The plan, if adopted, would take effect Jan. 1, 2010, giving lawyers and banks time to make necessary changes to comply.

Rules requiring lawyers to participate in IOLTA programs have been adopted in 38 states, while 23 have taken the step -- like that in the proposal -- of enhancing interest comparability. When adopted in other states, the amount of money raised for legal aid activities has increased a minimum of 50 to 65 percent. Since 1985 Tennessee lawyers have participated voluntarily in the program, which has produced more than $14 million for legal aid and other programs. Last year, the program generated $1.4 million.

The IOLTA proposal is one of several initiatives advocated by President Lewis as part of his access to justice campaign. Called “4ALL,” the campaign is a multi-faceted yearlong effort to enhance access to justice for Tennesseans who cannot afford legal representation. Additional information is available at www.tba.org/4ALL.

Download the court’s IOLTA order (which includes instructions for filing comments) or the groups’ petition.