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August 19, 2016 Dialogue

News and Notes

New Cy Pres Rules/Statutes for Legal Aid

Effective April 27, 2016, the South Carolina Supreme Court amended Rule 23 of the South Carolina Rules of Procedure to provide for cy pres distributions for legal aid purposes. Specifically, the amendment requires that, in class action matters where the claims process has been exhausted and residual funds remain, no less than fifty percent of residuals must be distributed to the South Carolina Bar Foundation “to support activities and programs that promote access to the civil justice system for low income residents of South Carolina.”

Further, the Wisconsin Supreme Court on June 24, 2016 amended Section 803.08 of the Wisconsin Statutes to require not less than fifty percent of unclaimed, residual class action funds to be disbursed to the Wisconsin Trust Account Foundation, Inc. “to support direct delivery of legal services to persons of limited means in non-criminal matters.” The effective date of this amendment is January 1, 2017, and the court’s order specifies that the amendment is applicable to proceedings pending on and commenced after the effective date. With the addition of South Carolina and Wisconsin, a total of 21 states now either permit or require the distribution of residual class action funds for legal aid purposes.


Proposed Amendments to Virgin Islands IOLTA Rule

On May 11, 2016, the Supreme Court of the Virgin Islands proposed amendments to Supreme Court Rule 211, which governs the Virgin Islands IOLTA program. If adopted, the amendments will change attorney participation in the IOLTA program from voluntary to mandatory, establish interest rate comparability, remove oversight of the program from the U.S. District Court of the Virgin Islands, and establish oversight within the Supreme Court of the Virgin Islands. In the initial order, the amendments were scheduled to become effective on July 1, 2016, unless modified as a result of any comments submitted within 30 days. However, on June 29, 2016, the Supreme Court ordered the extension of the effective date to September 1, 2016, acknowledging that a delay in the effective date was warranted to provide the court with a meaningful opportunity to consider all of the comments that were submitted.