BBA Hails Olchowski Decision, on Unidentified IOLTA Funds, as a Win for Access to Justice

The Boston Bar Association (BBA) praised yesterday’s ruling by the Supreme Judicial Court (SJC) that unidentified IOLTA funds should be transferred to the Massachusetts IOLTA Committee for disposition, just as the BBA had argued in an amicus brief joined by the Massachusetts Bar Association (MBA) and the Real Estate Bar Association (REBA). This result will deliver much-needed funds toward legal services and access to justice, as supported by the Committee.

The case in question, In the Matter of Gregory M. Olchowski (SJC-12730), involved a disbarred attorney whose records did not identify who was entitled to the funds on deposit in his IOLTA accounts. When his own attorney moved, in keeping with past practice in similar instances, for authorization to remit these unidentified funds to the IOLTA Committee, the State Treasurer intervened to claim they should instead be treated as “abandoned property” within the meaning of M.G.L. c. 200A and escheat to the Treasury.

In their brief, the BBA, MBA, and REBA—speaking on behalf of their respective members and the bar as a whole—argued that the Abandoned Property Act was never intended to address IOLTA funds, and that treating these funds as abandoned property would interfere with the practice of law by intruding on attorney-client confidences and jeopardizing the security of client information. This is because the Treasurer’s Office would have broad discretion to review attorney records related to IOLTA accounts holding such funds, yet, unlike the IOLTA Committee and the Board of Bar Overseers, lacks strong guidelines to protect against the disclosure of confidential information.

The state’s highest court, in an opinion by the late Chief Justice Ralph D. Gants for a 6-1 majority, accepted both these arguments, and further agreed with the brief—drafted by former BBA President Mary Ryan and her Nutter partner Micah Miller, Tom Carey of Hogan Lovells, and Francis Morrissey of Morrissey, Wilson & Zafiropoulos—that the power to regulate unidentified IOLTA funds falls squarely within the SJC’s inherent authority to regulate the practice of law.

Finally, the Court also took up the brief’s suggestion that it undertake additional rulemaking to address unidentified and unclaimed IOLTA funds, directing its Standing Advisory Committee on the Rules of Professional Conduct to propose amendments to Mass. R. Prof. C. 1.15 to incorporate the decision’s guidance into that rule.

“The BBA joined this brief to build on our 35-year commitment to the Massachusetts IOLTA program, as well as our mission to facilitate access to justice,” said Boston Bar President Martin F. Murphy of Foley Hoag, “and this ruling—by remitting unidentified funds toward the IOLTA Committee, where they belong—will help advance those goals.”

Justice David A. Lowy filed a dissent, arguing that the case should have been remanded for further development of the factual record, including on the question of whether investigating unclaimed funds in IOLTA accounts would necessarily violate the attorney-client privilege, as argued in the amicus brief—which he specifically cited. Said Mary Ryan, the brief’s co-drafter, “The bar’s concerns, as expressed in our brief, are based on practical experience and deep concern for the privilege and our duty to clients.”

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Amicus Curiae means, literally, friend of the court. Since 1975, the BBA has filed amicus briefs on matters related to the practice of law or the administration of justice. The 2020-2021 BBA Amicus Committee is co-chaired by Neil Austin of Foley Hoag LLP and Maria Durant of Hogan Lovells.