PA 09-152—sSB 1157
Finance, Revenue and Bonding Committee
AN ACT CONCERNING THE INTEREST EARNED ON LAWYERS' CLIENTS' FUNDS ACCOUNT PROGRAM AND THE TRANSFER OF CERTAIN COURT FEES TO FUND SUCH PROGRAM
SUMMARY: This act increases certain court filing fees and requires the chief court administrator, or a designee, by the last day of January, April, July, and October to:
1. certify the amount of revenue received as a result of the act's fee increases, and
2. transfer that amount to the organization administering the IOLTA (interest on lawyers' trust accounts) program to fund the delivery of legal services to the poor.
The act alters the participation requirements concerning clients' funds in IOLTA. Prior law allowed attorneys to deposit in interest-bearing IOLTA accounts clients' funds that were less than $10,000 or expected to be held for 60 days or less. The act instead allows attorneys to deposit clients' funds in these accounts regardless of the amount or expected duration of the deposit unless the attorney determines in good faith that the client could earn more than it would cost to set up a separate interest-bearing account for the client. The act requires (1) attorneys to consider certain factors in making this determination and (2) specifies that attorneys who determine in good faith to deposit funds in IOLTA accounts after considering these factors cannot be disciplined for doing so.
By law, unchanged by this act, attorneys (1) must promptly turn funds over to their clients on request and (2) can choose to deposit a client's funds regardless of the amount or period for which they are expected to be held, in a separate interest-bearing account established for the client's benefit.
EFFECTIVE DATE: July 1, 2009.
INCREASED FILING FEES
The act increases the following court fees:
1. the jury fee in civil actions, from $350 to $425;
2. the filing fee for bringing a case in the Superior Court, from $225 to $300;
3. designation of a case as a complex litigation case, from $250 to $325;
4. application for a prejudgment remedy, from $100 to $175;
5. a motion to open, set aside, modify, or extend any Superior Court civil judgment, from $70 to $125 (small claims cases stay at $25 and housing cases at $35);
6. filing a motion to open or re-argue a judgment in any civil appeal rendered by the Supreme Court or Appellate Court or to reconsider any other civil matter decided in either court, from $70 to $125; and
7. application by a judgment creditor for a wage execution against a judgment debtor who fails to comply with an installment payment order, from $35 to $75.
FACTORS TO BE CONSIDERED IN DECIDING WHETHER TO PARTICIPATE IN IOLTA
Under the act, lawyers must consider the following in determining whether to deposit a client's funds in an IOLTA account:
1. the amount of the funds to be deposited;
2. the expected duration of the deposit, including the likelihood of delay in resolving the relevant transaction, proceeding, or matter for which the funds are held;
3. the interest rates, dividends, or yields at eligible institutions where the funds are to be deposited;
4. the costs associated with establishing and administering interest-bearing accounts or other appropriate investments for the client's benefit, including service charges, minimum balance requirements, or fees;
5. the costs of the lawyer's or law firm's services for establishing and maintaining the account or other appropriate investments;
6. the costs of preparing any tax reports required for income earned on the funds; and
7. any other circumstances that affect the capability of the funds to earn income for the client in excess of the costs incurred to secure the income.
IOLTA is a method of raising money for charitable purposes, primarily for funding legal services for the poor. In Connecticut, interest earned on IOLTA accounts is managed by the Connecticut Bar Foundation, which distributes it to legal services providers and low-income law students who have applied for scholarships.
OLR Tracking: GC: jr: JL: tjo/df