Great Victory for the Expansion of Pro Bono Bankruptcy Assistance in New Jersey

Since its inception in 2004, the City Bar Justice Center’s (CBJC) Pro Bono Consumer Bankruptcy Project (CBP) has been a highly successful initiative. The project recruits, trains and mentors law-firm attorneys who, working with Justice Center staff, provide free legal assistance to low-income debtors in bankruptcy matters.

Part of the success of this model was due to the issuance of a favorable Formal Ethics Opinion (2005-1) by the City Bar Committee on Professional and Judicial Ethics, wherein the committee concluded that under certain conditions volunteer lawyers from large commercial law firms could represent both low-income debtors in Chapter 7 bankruptcy cases and their creditors in unrelated matters without having a conflict of interest. This opinion removed a significant road block to law firm attorneys looking to volunteer with projects like the CBP. The opinion has also served as a model for pro bono programs in other jurisdictions such as Boston.

Recently the New Jersey Volunteers Lawyers for Justice (VLJ) created a low-income bankruptcy clinic using a model similar to that of the CBP and enlisted the help of volunteers from the firm of Lowenstein Sandler LLC, a New Jersey-based firm that already volunteers with the CBP. Because some of the prospective volunteers were concerned about possible conflicts of interest, the VLJ asked the New Jersey Advisory Committee on Professional Ethics (ACPE) to issue an opinion.

ACPE concluded that before volunteers could assist the VLJ, they would have to inform both prospective clients and obtain the consent of each to participate in the program. This condition would effectively prevent most volunteers from working with the VLJ. The VLJ appealed the opinion to the Supreme Court of New Jersey. The firm of DLA Piper LLP submitted an amicus brief to show the public benefit of pro bono representation for bankruptcy-related issues, and they asked the CBP to submit the City Bar Ethics Opinion and supporting statistics showing the need for, and value of, pro bono assistance in these types of matters.

On July 2, 2014 the Supreme Court of New Jersey issued a unanimous decision overturning the action of the ACPE. In doing so they cited the City Bar Ethics Opinion in support of their ruling and went on to state:

“Programs like the VLJ’s clinic help address this crisis [the inability to obtain legal services in civil matters], as volunteer lawyers try to pave the way for debtors to recover financially. We commend the lawyers in this and other pro bono initiatives who offer their skill and help at a time of need. By doing so, they help bridge the justice gap that leaves many low-income residents in New Jersey without legal services.”

This decision is a great victory in the fight for more pro bono legal services for those in need. The CBP is happy to have been of assistance to those organizations and firms who brought this case and fought for the successful outcome.