Civil legal aid is a critical tool to stop the cycle of poverty and protect North Carolinians and their families. The recently adopted state budget does not restore the over $2.7 million in legal aid state funding lost since 2008.
In 2014, over 1.7 million people in North Carolina lived on incomes below the poverty level of $23,850 for a family of four. As unemployment numbers fall and the economy improves, poverty persists.
Poverty creates or exacerbates issues that easily become legal problems. According to a 2014 Federal Reserve study, 47 percent of those surveyed said they would have to take out a loan or sell something to pay for a $400 emergency expense. For people living near the poverty line, a single problem often creates a domino effect. One-time events – job loss, lapse of health insurance, a family crisis – can have a devastating effect.
the role of poverty
If not addressed immediately, more difficult problems can result: homelessness, domestic violence and family instability. In turn, these crises place a far greater burden on society in the form of increased costs for health care, law enforcement and public welfare. However, legal needs studies show that 80 percent of low-income people have no access to a lawyer when they need one in civil matters.
Few things are as important to legal aid’s clients as their vehicle. Without a car, they lack no access to employment, groceries or health care. Yet those who scrape their dollars together for months to buy an old used car can find this vital transportation vulnerable even when they do not violate the terms of their financing agreement. Such was the case for “Penny,” a then-unemployed hair dresser and single mother of two young boys whose car was repossessed Dec. 30, 2014.
On Nov. 4, 2014, Penny bought a 2003 model car, paying $1,000 down and financing the $2,500 balance at an annual interest rate of 25 percent from a used-car dealer. Penny provided the dealer with proof of insurance. Indeed, Penny kept her insurance coverage and her bi-monthly loan payments current. Her only mistake – which was not a breach of her contract – was that she switched insurance carriers. Unfortunately, this omission led to tragic consequences for Penny.
When the original carrier informed the dealer about the policy cancellation, the dealer set the wheels in motion for repossession even though he had no right to do so. Immediately after the repo, Penny called the dealer and even had the insurance agent for her current policy do the same. However, the dealer was unrelenting, insisting that Penny could not recover the car unless she paid over $400 in fees. Penny called the dealer multiple times, and each day the dealer demanded a higher price to return her vehicle.
With nowhere else to turn, Penny called Legal Aid of North Carolina, and it began negotiations with the dealer. Legal aid informed the dealer that his repo in the absence of a default violated the law and that he could be subject to penalties. The dealer was persuaded to return the car to Penny immediately without charging her a dime.
access to justice
Civil legal aid provides important return on investment for taxpayers, businesses and communities. A lack of access to justice for some is a burden to all. Strengthening civil legal aid saves taxpayers and businesses money, restores communities and boosts local economies.
In 2013, the N.C. Equal Access to Justice Commission, a commission of the N.C. Supreme Court, released a report demonstrating that the economic impact of legal aid is over $48 million annually. For every dollar spent by the state to provide legal services, nearly $10 flows into the economy.
Civil legal aid helps streamline the court system by fostering efficiency, reducing the number of unnecessary lawsuits and cutting down on court costs and staff overtime. Legal aid takes only the most meritorious cases and settles most of them out of court.
Legal aid is not only cost-effective, it also preserves the basic human needs of North Carolina’s most at-risk citizens – children, seniors, disabled veterans and our poor. Resources are at the heart of access to justice, and we need to make funding for legal aid a priority.
Kirk Warner is a partner at Smith Anderson in Raleigh, a member of the NC Equal Access to Justice Commission and a colonel (retired) of the United States Army, Judge Advocate General Corps.