Word: iolta
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Under the nationwide program Interest on Lawyers’ Trust Accounts (IOLTA), the money that lawyers briefly hold in trust for their clients is pooled, and interest from the pooled money funds legal services for the poor. Lawyers’ participation in the program has been mandatory in Massachusetts since...
...December, Fried argued before the Court that—although lawyers’ clients suffered no loss, because prior to the introduction of IOLTA the funds had been held in non-interest-earning accounts—the program was in violation of the Fifth Amendment’s protection of private property. “It is a taking even if the just compensation is zero,” Fried argued at the time...
...dollars’ interest for the fund, they would not have earned any interest had the money been held in individual accounts because the cost of opening and closing such accounts is prohibitively expensive. Stevens wrote that because the plaintiffs lost no money, and because by its design, the IOLTA fund would never cause a loss to its contributors—lawyers are mandated to set up private-interest earning accounts if their clients could possibly profit from it—there was no taking. Thus, the program is constitutional...
...Court’s ruling is especially welcome in today’s economic climate, as budget cuts curtail state funding of legal services programs. The Court upheld IOLTA narrowly, by a 5-4 margin; it is troubling to imagine the fate of legal services programs, and of the poor who rely on them, if the Court had found the program unconstitutional. While Fried’s was doubtless a well-intentioned attempt to defend what he saw as an attack on constitutionally-guaranteed property rights, his case, Brown v. Legal Foundation of Washington, endangered legal services for the poor...
...such method would simply involve the lawyers obtaining clients’ permission before funds are channeled to IOLTA...