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(Asheville, NC) – – Civil legal aid organizations announced the filing of a new legal case on that is designed to restore funding from the North Carolina Interest on Lawyer’s Trust Accounts (IOLTA) program so that people with low incomes can continue to access free civil legal aid services across the State.
At issue in the lawsuit is the 2026 state budget enactment, which dramatically alters the court-ordered program that has historically funded civil legal aid through grants issued by the State Bar, the Interest on Lawyers’ Trust Accounts program, or IOLTA. The legislation departs from the program’s four decades of supporting civil legal assistance and imposes restrictions on the legal advocacy that any organizations receiving IOLTA funds may engage in. Importantly, IOLTA is not a taxpayer-funded program and long funded critical legal aid services for thousands across the mountains of Western North Carolina (WNC).
Pisgah Legal Services Executive Director Jackie Kiger said, “Unless you are an attorney, you’ve probably never heard of IOLTA, but let me assure you, IOLTA funding has been a critical lifeline for people in need since the 1980s, providing millions of dollars over the years that have improved or saved the lives the countless North Carolinians, including thousands of our neighbors here in WNC.”
She continued, “Redirecting these funds away from legal aid programs will mean turning people away and forcing them to try to navigate complex legal systems alone, including: domestic violence survivors, veterans, seniors, families at risk of losing their homes, scam victims, folks facing health crises and people in our mountain region still recovering from Hurricane Helene. It is our duty to protect the interests of our clients, and we need IOLTA funding to provide the critical services and advocacy that they desperately need.”
Kiger stated, “When the North Carolina Legislature changed the purpose of IOLTA funding, they violated the North Carolina Constitution’s separation of powers by interfering with the authority of the State’s Supreme Court. The Court ruled previously, and unanimously, that the judicial branch has the authority to regulate North Carolina lawyers and required IOLTA funding to support civil legal aid across the state.”
She continued, “This case also concerns the Legislature’s attempt to ban access to IOLTA funding for organizations that speak out on certain topics or engage in other constitutionally protected expression. This is a clear violation of the fundamental rights of free speech, association, petition, and assembly under the First Amendment and the North Carolina Constitution.”
Kerry Friedman, a retired attorney and former Board Chair of IOLTA and Pisgah Legal Services, is a long-time volunteer and PLS supporter who also commented.
Friedman said, “As former Chair of the Board of Trustees of IOLTA, I understand the value and tremendous impact of this program. It has provided millions of dollars to assist people in North Carolina without requiring the use of tax dollars, and it should continue to do so. While we are in full support of funding for criminal indigent defense programs, those dollars should come from the State as is stipulated in the North Carolina Constitution. IOLTA funds should be used for the purpose for which they were intended, namely civil legal aid.”
The suit was filed formally October 9, 2026 in Wake County. Named in the case are Destin C. Hall, as Speaker of the NC House of Representatives; Philip E. Berger, as President Pro Tempore of the NC Senate; The North Carolina State Bar; North Carolina Interest On Lawyers’ Trust Accounts Board Of Trustees; and The State Of North Carolina.
IOLTA’s 2025 Annual Report, which shared results from 2024, stated that nearly 100,000 household members benefited from the legal support provided by NC IOLTA grantees. This included 10,000 domestic violence victims.
IOLTA’s began in the 1980s, when members of the Bar began a voluntary effort to fund the State Bar’s IOLTA grant program. By 2007, that voluntary program had proven so effective and transformative for low-income North Carolinians that the Supreme Court of North Carolina determined that this voluntary program for North Carolina lawyers needed to become a mandatory one, to ensure that the remaining unmet legal needs of low-income North Carolinians could be provided by members of the Bar.
In a unanimous, groundbreaking decision, the Supreme Court’s issued an order in 2007 mandating that every lawyer in North Carolina who maintains client trust accounts must support the IOLTA grant program through the interest earned on those trust accounts.
The lawsuit will now proceed through the legal process.
For nearly 50 years, Pisgah Legal Services has remained steadfast in its mission to advance justice, protect dignity, and advocate for the rights of the clients.
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