Judge Grants Injunction Allowing Non-Lawyers to Help Individuals Sued for Unpaid Debts

A District Court judge in New York has granted a preliminary injunction prohibiting the state Attorney General from enforcing a law that bars non-lawyers from practicing law in the state, in a case that was filed to allow volunteers to help individuals being sued for their unpaid debts.

A copy of the ruling in the case of Upsolve v. Letitia James can be accessed by clicking here.

Upsolve filed its complaint earlier this years, saying the state’s Unauthorized Practice of Law statutes violate the First Amendment of the Constitution. Upsolve has created a “justice advocate training guide” that would be used to help volunteers walk consumers who are being sued for unpaid debts. Individuals who attempt to practice law without a license could be charged with a criminal misdemeanor. Upsolve’s suit seeks to carve out an exemption for its program rather than overturn the rule. Non-lawyers who pass an exam are currently allowed to work with individuals filing claims for workers’ compensation, the suit notes.

In New York, about 95% of consumers who are sued for unpaid debts are not represented by an attorney, and 88% of consumers did not respond to the suit, often resulting in a default judgment against them.

Judge Paul Crotty of the District Court for the Southern District of New York ruled this week that the Unauthorized Practice of Law statutes can not be applied to the plaintiff’s program “because the First Amendment protects their legal advice as speech and the UPL rules are not narrowly tailored to satisfy strict scrutiny in this context. Further, the balance of equities favors an injunction because Plaintiffs’ program would help alleviate an avalanche of unanswered debt collection cases, while mitigating the risk of consumer or ethical harm. And enjoining enforcement against Plaintiffs alone, whose activities are carefully limited to out-of-court advice, will not threaten the overall regulatory exclusivity of the legal profession.”

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