Putting justice out of reach Supreme Court: Ruling on interest from lawyers' accounts jeopardizes legal services for poor.

June 19, 1998

THOSE WHO worry about the fairness of American justice can take some comfort that the Supreme Court this week stopped short of declaring outright that state programs to fund legal services for the poor are unconstitutional.

What the court did decide, however, is threat enough to a system known as IOLTA (Interest on Lawyers' Trust Accounts) that provides about $100 million a year for legal aid services.

IOLTA programs became possible as banks began paying interest on checking accounts in the early 1980s. By pooling the small sums deposited with them for such purposes as escrow deposits or pending legal settlements, lawyers were able to build large accounts that earned sizable sums of interest. Those earnings were seen as an ideal source for legal aid funds.

Now lower courts will begin sorting out the implications of the ruling. IOLTA funding for legal aid services may not survive that process. Or it may turn out, as Justice David Souter suggested in his dissent, that the high court has produced an "essentially abstract proposition" with "no practical consequence."

When poor people cannot afford a lawyer to fight a questionable eviction, claim Social Security benefits or process other routine matters, they face a distinct disadvantage.

Since IOLTA programs came along, Congress has severely cut federal funding for legal aid.

Now states and the federal government may have to find other ways to fund these services or risk seeing the Constitution's assurance of equal justice turn into a sham.

Pub date: 6/19/98

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