Arkansas Supreme Court Requests Comments on Proposed Rule on Unclaimed, Unidentifiable Client Trust Funds

The Arkansas Supreme Court has issued an order soliciting comments from the bar and public regarding proposed changes to the Arkansas Rule of Professional Conduct governing IOLTA accounts that would lay out a mechanism for addressing situations where an attorney, law firm, or estate of a deceased attorney (1) winds up in possession of client or third party funds and the client or third party cannot be located, despite diligent efforts to locate the rightful owner; or (2) is in possession of funds in a client trust account that cannot be traced back to a particular client.

In the first scenario—involving “unclaimed” trust account funds—the Arkansas Uniform Disposition of Unclaimed Property Act has historically served as the only source of guidance. Under that Act, client funds are presumed to be abandoned after seven years have passed without any contact or instructions from the property’s owner. The process for disposing client funds under this Act is often cumbersome—particularly for attorneys dealing with relatively small amounts of money—and it is inconsistent with the five-year period that attorneys are normally required to retain client records.

In the second scenario—involving “unidentifiable” trust account funds—there is no guidance whatsoever for what attorneys should do with such funds, as the Arkansas Uniform Disposition of Unclaimed Property Act contemplates that there is a known person who is the rightful owner. Some examples of situations that might result in unidentifiable funds in a trust account include:

  • When a lawyer tries to reconcile an account after a number of years;
  • When a lawyer who has died kept no or inadequate records and the representative of the estate is unable to determine what clients may be entitled to the remaining funds;
  • When law firms merge and combine records, there may be balances that have no client identifier surviving in the records.

A number of other states have implemented or considered implementing provisions to address the problem of unclaimed or unidentified trust account funds.

The proposed Arkansas rule change addresses these scenarios by providing a simple process for attorneys to dispose of unclaimed and unidentifiable funds consistent with applicable ethical obligations, while generating additional revenue for the IOLTA Program of the Arkansas Access to Justice Foundation, which will use the funds to make grants supporting the provision of free civil legal aid to the poor. Historically low interest rates have resulted in catastrophic decreases in IOLTA revenue over the last five years, resulting in significant funding cuts for legal aid.

Comments should be submitted in writing and addressed to Stacey Pectol, Clerk of the Arkansas Supreme, Court, Attn: Rule 1.15, Justice Building, 625 Marshall Street, Little Rock, Arkansas 72201. The deadline for submitting comments is September 15, 2015.

Commission Soliciting Comments on Proposed Rule Changes on Unbundling, Pro Se Assistance

The Arkansas Access to Justice Commission is soliciting comments from the bench, bar, and public on a set of proposed changes to select rules of civil procedure, professional conduct, and judicial conduct, as well as adoption of a new administrative order. The Arkansas Access to Justice Commission and its Self-Represented Litigant Task Force have crafted these proposed changes in an effort to implement the Commission’s plan for addressing significant growth of self-representation in Arkansas over the last decade. In developing its plan, the Commission had the benefit of a 2011 study it conducted in partnership with the Clinton School of Public Service, which indicated that as many as 95% of select civil cases have at least one unrepresented litigant. The Commission also relied on the 2013 recommendations of John Greacen, a nationally recognized expert on self-represented litigants. A 2014 Arkansas Lawyer article offers background information on the current state of access to civil justice makes the case for how limited scope representation (also known as “unbundling”) can reduce the justice gap and generate new sources of business for private attorneys.

Our proposed rule changes include the following:

  • Adoption of an administrative order regarding the provision of legal information to the public by court staff, librarians, and others who have specialized knowledge of the court system or legal resources;
  • Modification of Rule 2.2 of the Judicial Code of Conduct to provide more explicit guidance on the types of accommodations judges may make to facilitate the ability of all litigants, including self-represented litigants, to be fairly heard;
  • Modification of Ark. R. Civ. P. 11 and Ark. R. Prof’l  Conduct 1.2, 4.2, and 4.3, to provide more explicit guidance for attorneys who provide limited scope legal services;
  • Adoption of a new Ark. R. Civ. P. 87, which provides for automatic termination of a limited scope engagement upon notice to the court and opposing counsel of the matter’s completion.

Other states that have successfully implemented similar rules and guidelines have found that judges and court staff are able to do their jobs more effectively when they are not burdened with deficient pleadings and unprepared litigants, that court clerks are able to successfully avoid ethical dilemmas when assisting pro se litigants, that private attorneys are able to more easily represent their clients when opposing self-represented litigants have the proper information and guidance, and that private attorneys may develop new sources of business from a previously unprofitable market of clients by providing limited scope representation. These recommendations are modeled in significant part on similar rules and policies from Alabama and Colorado.

The Commission is currently soliciting input from major stakeholders in the coming months, and our goal is to finalize the proposed rules to submit as a petition to the Arkansas Supreme Court in early 2016.

You may direct any comments, questions, or concerns to Amy Dunn Johnson, Executive Director, Arkansas Access to Justice Commission, 1300 West 6th Street, Room 110, Little Rock, AR 72201, (501) 492-7172.

Veteran Legal Aid Attorney Receives Equal Justice Distinguished Service Award

Center for Arkansas Legal Services Managing Attorney Dustin Duke is the 2015 recipient of the Arkansas Bar Foundation‘s Equal Justice Distinguished Service Award, according to the Foundation’s Executive Director Ann Pyle. The award, which was presented at a June 10, 2015 awards banquet, is given each year in recognition of commitment to and participation in equal justice program for the poor, including pro bono efforts through legal services programs.

During his 14 years of practice, Duke has served clients through both the Center for Arkansas Legal Services and Legal Aid of Arkansas. In his 11 years with the Center, he has handled more than 3,800 cases, 165 of which were in 2014.  Much of his case work has focused on family law and domestic abuse. In 2014, Duke was among a team of legal aid attorneys who succeeded in getting Arkansas’s criminal eviction statute overturned in the state’s most populous county.

“Dustin is often the first person to arrive at the office in the morning, and the last to leave in the evening,” said Center for Arkansas Legal Services Executive Director Jean Carter. “He works tirelessly to provide his clients with the best possible representation, and his colleagues respect his leadership and his commitment to obtaining justice.”

Policy Brief on Access to Justice in Rural Arkansas Released

Arkansas’s rural communities face a looming crisis when it comes to access to essential legal services: a dwindling and aging attorney population in the state’s 25 most rural counties. A policy brief entitled Access to Justice in Rural Arkansas, released today by the Arkansas Access to Justice Commission, indicates that these counties average fewer than 0.44 practicing attorneys per 1,000 residents. Seven of these counties have no attorneys licensed this millennium, and one has no attorneys at all.

Despite these sobering statistics, there is hope. Many Arkansas law students would consider locating in a rural part of the state if certain incentives were made available. Rural legal aid fellowships, loan repayment assistance, and paid internships are among the programs that a majority of law students showed interest in, according to the survey of law students and attorneys that is the subject of the policy brief. Rural attorneys indicated a greater willingness to mentor and hire young lawyers than did attorneys from non-rural communities.

The survey probed the likely effectiveness of five complementary programs that the state’s two law schools and the Arkansas Access to Justice Commission are jointly considering. Among the factors most likely to encourage students to practice in a rural setting were (1) the ability to have one’s own practice, (2) the opportunity to become a community leader, and (3) the ability to have and maintain their own clientele. Factors most likely to discourage students from locating to rural communities included (1) the perception that they would earn a lower income, (2) a perceived lack of career and economic opportunities, and (3) a relative lack of entertainment, restaurants, and similar amenities.

For questions about the policy brief, which details the results of a series of recent surveys conducted by Prof. Lisa R. Pruitt of UC Davis School of Law, please contact us. A forthcoming article in the University of Arkansas at Little Rock Law Review will provide a more in-depth analysis of the rural access problem and its implications.

Supreme Court Appoints Justice Robin Wynne, Judge Robert McCallum to Commission

The Arkansas Supreme Court has announced the appointments of Justice Robin Wynne and Circuit Judge Robert McCallum to the Arkansas Access to Justice Commission. Justice Wynne succeeds retired Arkansas Supreme Court Justice Annabelle Tuck, and Judge McCallum succeeds Judge Leon Jamison. We are grateful for the tremendous contributions that our outgoing commissioners have made to our efforts to improve access to the civil justice system for all Arkansans.

IOLTA Insurance Parity Extended to Credit Unions

On December 18, 2014, President Obama signed into law the Credit Union Share Insurance Fund Parity Act, which provides for federal insurance of IOLTA funds held at credit unions in the same manner and amount as provided for through the FDIC at banks. Even though Arkansas’s Rule 1.15 already authorizes credit unions as IOLTA depositories, the lack of insurance for funds belonging to non-credit-union-member clients was likely a major deterrent. Passage of the act eliminates what has been the major obstacle for attorneys wishing to utilize credit unions for their IOLTA accounts. Do you do business with a credit union? Would you consider opening an IOLTA account with one? Contact us and we can walk you through the process.

For additional information about the Credit Union Share Insurance Fund Parity Act and its significance for the IOLTA community, click here.

Commission Honors Legal Aid Advocates at Annual Staff Conference

The Arkansas Access to Justice Commission honored two legal aid staff members at the 2014 Statewide Legal Aid Staff Conference held October 15-17 at Lake DeGray State Park. Center for Arkansas Legal Services Managing Attorney Dustin Duke and Legal Aid of Arkansas paralegal Kathy Grady received the Commission’s Champion of Justice Award in recognition of their exemplary commitment to ensuring that disadvantaged Arkansans have access to civil justice through high-quality legal representation.

Duke, who works in the Little Rock office, has handled more than 3,800 cases during his ten years with legal aid. Much of his case work has focused on family cases involving domestic abuse. Grady is a veteran paralegal in the LAA Newport office, where she has worked for 34 years.

“Dustin and Kathy are both accomplished, passionate advocates who put their hearts and souls into serving Arkansas’s most vulnerable citizens,” said Commission Executive Director Amy Johnson. “They do it with no expectation of recognition or even thanks. They represent the very best of what the legal profession should be about.”

The Champion of Justice Award is given to an attorney or staff advocate who has worked for legal aid for three or more years; whose primary job responsibilities include direct service to clients; and who handles client matters with compassion, tenacity, and professionalism.

Access to Justice Commission Releases Final Economic Impact Report

The Arkansas Access to Justice Commission has just published its final report analyzing the economic impact of civil legal aid in Arkansas. The study, which was completed in April 2014 by a team of students from the Clinton School of Public Service, was the subject of presentations given on May 5 in Little Rock and October 2 in Rogers. Significant findings included the following:

  • In 2013, Arkansas’s two legal aid providers—CALS and LAA—served nearly 12,000 clients in 2013 at a cost that was $2.4 million less than the equivalent cost of such services in the private legal market.
  • Legal aid saved clients an estimated $3.4 million in costs for nonlawyer legal document services.
  • Legal aid put nearly $2.3 million into the pockets of their clients and helped them avoid liabilities of over $9.4 million.
  • Representation in housing foreclosure cases prevented $2.2 million in diminished housing values.
  • Legal assistance for domestic violence victims likely prevented more than $3.9 million in costs for emergency shelter, medical expenses, and social services.
  • Revenues that legal aid brings into the state generate an additional $8.8 million in economic activity in the state by virtue of their multiplier effect in local communities.

In all, legal aid in Arkansas yielded a total of over $32 million in economic activity in Arkansas in 2013.

“These numbers are even higher than the original projections developed this past spring,” said Commission Executive Director and Project Supervisor Amy Johnson. “It confirms what we have long known to be the case, which is that civil legal aid has positive effects that ripple through our economy and society. It is a highly effective tool for fighting poverty.”

Legal Aid of Arkansas Receives ABA Legal Access Job Corps Catalyst Grant

Legal Aid of Arkansas is one of seven recipients nationally to receive a catalyst grant from the American Bar Association’s Legal Access Job Corps initiative, according to a release issued by the ABA earlier this month. A total of 96 applicants submitted grant proposals to the program, which was created by ABA President James Silkenat “to help nurture innovative programs that bridge the unmet legal needs of our society and the unmet employment needs of our young lawyers.”

The catalyst grant will provide $15,000 to LAA for the creation of two one-year fellowships for recent Arkansas law school graduates. LAA will match the funds dollar-for-dollar and provide supervision, mentoring, support, and assistance as they become established in the practice of law. Fellows must demonstrate a desire to establish law practices in rural and underserved areas of Arkansas and show a commitment to serving the legal needs of poor and moderate-income persons. Among the fellows’ responsibilities will be helping establish a “low bono” or “modest means” pro bono panel to provide services to Arkansans who do not qualify for legal aid, but who do not have the means to hire a private attorney.

“Arkansas has some of the most impoverished communities in the country,” said LAA Executive Director Lee Richardson. “This program will ultimately give us the opportunity to build a self-sustaining legal service delivery model to assist Arkansans who live in poor, sparsely populated areas of the state.”

Friday Firm’s Harry Light Honored for Commitment to Access to Justice

Friday, Eldredge & Clark partner Harry Light has received the Arkansas Bar Foundation’s 2014 Equal Justice Distinguished Service Award. The award, which was presented at a June 11 awards banquet in Hot Springs, is given annually to recognize dedication to and participation in the equal justice program for the poor, including pro bono efforts through legal services programs.

Light, who practices in the areas of bankruptcy, creditors’ rights, commercial litigation, and trademark/copyright applications, has also served as the mayor of Cammack Village, Arkansas, since 1995.

Light has demonstrated an ardent commitment to improving access to justice in Arkansas through his pro bono service in the Arkansas Delta. In 2013 alone, Light donated more than 64 hours of his time to the medical-legal partnership in Clarendon, Arkansas, at Mid-Delta Health Systems. On the third Tuesday of every month, he interviews clients, provides advice, and takes cases.

“I am humbled each time I visit with legal aid clients in the Delta and am fortified by the strength and courage they exhibit in meeting life’s basic challenges with limited means,” Light said. “To be able to assist them in some small way is one of the most fulfilling and rewarding privileges of being an Arkansas lawyer.”

Light has been a member of the Volunteer Organization for the Center for Arkansas Legal Services (VOCALS) since 1990. He is also a member of Legal Aid of Arkansas’s Equal Access to Justice Panel (EAJP).

Light puts precedence on making personal connections through his pro bono work. In 2012, he handled a case involving a guardianship for two newborn twins. A twin himself, Light was eager to assist the babies’ grandmother in filing a petition. Over the Thanksgiving holiday that year, Light stopped by the Clarendon grocery store to pick up a gift certificate for his client, who was caring for two other grandchildren in addition to the twins. After visiting the family, he remarked to a colleague, “I never knew pro bono work could be so emotional.”

In addition to his pro bono work, Light volunteers for the Central Arkansas Rescue Effort for Animals (CARE), which he founded in 1998. He also serves on the boards of Metroplan and the Arkansas Better Business Bureau. Light has served on the Arkansas Bar Association’s House of Delegates and Board of Governors, and in 2009, he received the Association’s Golden Gavel Award for his work as the Chair of the 2009 Annual Meeting.

Arkansas Access to Justice Commission members Representative John Vines and D’lorah Hughes, as well as Arkansas Access to Justice Foundation board member Frank Sewall, were also recognized at the June 11 ceremony for their contributions to the legal profession.

Vines was awarded the Arkansas Bar Association Presidential Award. The award honors an individual who works to advance the administration of justice and promotes the principles of integrity, learning, and public service. Hughes received the Special Award of Merit for her substantial contributions to the education of future Arkansas lawyers through her work in the Juvenile Law Clinic at the University of Arkansas School of Law.

Sewall received the Arkansas Bar Foundation’s C.E. Ransick Award of Excellence. This award is presented to an attorney each year whom the Arkansas Bar Association recognizes for setting the bar of excellence and for demonstrating exemplary practice in and out of the courtroom.