Legislation proposing a filing fee surcharge in all Maryland circuit court and district court civil cases was endorsed by the Maryland State Bar Association’s Board of Governors on February 19 as a means of increasing revenue for civil legal services to the poor. To help alleviate the current legal services funding crisis, MSBA backed HB 106, a proposal which calls for a filing fee hike of $45 for a circuit court case and, in district court, a $5 jump per summary ejectment case and a $10 rise for all other cases. If passed by the 2010 Maryland General Assembly, this surcharge should engender close to $8.5 million for legal services to the indigent.
This surcharge is sorely needed to supplement IOLTA (Interest on Lawyer Trust Accounts) funding for legal services which has hit an unprecedented shortfall due to our recessionary times. At the same time, the indigent’s need for legal assistance has never been higher, and many lower middle-income families have joined their ranks as a result of unemployment, foreclosures and sudden poverty. The economic crisis has devastated a growing population of needy people as well as the legal aid funding meant to help them.
MSBA backed a $2 surcharge for all district court cases and a $10 surcharge for all circuit court cases in 1998, which generated $2.3 million for civil legal services. In 2004, the Association supported a $25 filing fee surcharge on all circuit court cases to enhance revenue for IOLTA when the state’s principal funding mechanism for civil legal services hit a rocky road. This surcharge increased legal services funding by $4.9 million.
Essentially, a surcharge is an add-on to a fee already in place to file a civil case in circuit and/or district court, with the revenue specifically earmarked for the Maryland Legal Services Corporation (MLSC) to fund civil legal services for the indigent. Historically, a filing fee surcharge is one of the most feasible mechanisms for boosting legal services funding in volatile times, when government funding – the best vehicle – is not realistic.
As proposed, the 2010 measure calls for a circuit court filing fee hike from $25 to $70 per case and a district court rise from $5 to $10 per summary ejectment case and from $10 to $20 for all other cases. The revenue raised will help fund MLSC’s 35 legal services provider groups which offer direct service to the poor at a time when the need is overwhelming.
Up until 2008, IOLTA revenue generated over $6 million to fund civil legal services in Maryland, but when the recession devastated the economy in 2009, IOLTA revenue dropped 45 percent, down to $3.9 million. This loss, compounded by severe cuts in state government funding for civil legal services, resulted in major cutbacks in services at a time when the need was soaring, along with unemployment and foreclosures in the state. Thus, the projected IOLTA outlook for 2010 will be down 70 percent, dropping below $2 million, unless the Legislature passes the surcharge.
On January 27, the House Judiciary Committee conducted a hearing on House Bill 106. On January 4, SB 248, the filing fee surcharge companion to HB 106, was heard by the Senate’s Judicial Proceedings Committee. In addition to MSBA’s BOG support, four of its Sections, Delivery of Legal Services, Family and Juvenile Law, Elder Law and Litigation, have endorsed this measure, as have the Bar Association of Baltimore City and the Montgomery County Bar Association. MSBA is joining MLSC and the Maryland Access to Justice Commission as major proponents of this legislation.