Imagine this: You take out student loans and, 21 years later, a debt-collection company sues you for the outstanding balance. But you don’t know you’re being sued—either the company doesn’t track you down to tell you or it tries but fails to reach you. And because you don’t know you’re being sued, you don’t hire a lawyer to go to court to tell your side of the story—so the judge automatically rules in favor of the collection company. By the time you realize what’s happening, your bank account is frozen, which means you can’t pay your mortgage or even buy groceries—because the debit card linked to your account is suddenly worthless.
That’s what happened to Adunni Noibi in the early months of the COVID pandemic. The Iowa health care worker says she had no idea she was being sued—she says she wasn’t notified by the company that took action against her—and that even her bank didn’t tell her that her account was being frozen until after the fact. Noibi figured that a lawyer might help, but recalled thinking, “How can I get a lawyer when I have no money? I was barely getting by.” Luckily, she contacted Iowa Legal Aid and, with its lawyers’ help, she reached a resolution with the collection company, and her bank account was unfrozen.
And although her case may sound unusual, it’s not, according to research by The Pew Charitable Trusts’ civil legal system modernization project.
A quick primer: Civil courts (which are separate from criminal courts) hear a wide range of cases, including evictions, medical malpractice, personal injury, and debt collection cases like Noibi’s.
And the debt collection cases are soaring.
“Debt collection cases are the single most common type of civil court case in the United States today,” says Erika Rickard, who directs the Pew project. “They went from 1 in 9 civil cases in the 1990s to 1 in 4 civil cases in 2013.” The data is spotty at the state level, but in 2018, debt lawsuits were the most common type of civil case in nine of the 12 states for which some data is available.
Pew’s research found that many people don’t respond when a debt collector takes legal action against them, often because—like Noibi—they’re unaware that they’re being sued. They might get something in the mail from a company they don’t recognize and assume it’s junk mail or a scam. But not responding has real ramifications.
“The way our system operates, the court is supposed to hear both sides and then issue a judgment. But if only one side is in the courtroom, only one side gets heard,” Rickard says. “In states where we’re able to look at court data, we’ve found that 7 out of 10 debt collection cases end in a default judgment in favor of the debt collector.”
That means, Rickard says, that “debt collectors don’t have to prove their case. They just win because they’re in the room and the consumer didn’t respond to the lawsuit. So, the judge never reviews the facts of the case to make sure that the right person was sued for the right amount. The judge just stamps the case in favor of the debt collector.”
And when consumers do show up for their court hearing, they’re usually tackling the legal system without a lawyer.
“In about 3 out of 4 civil cases, at least one side isn’t represented by a lawyer,” says Rickard. The numbers are even higher for eviction, mortgage foreclosure, and debt collection, the so-called business-to-consumer lawsuits. “In about 90% of those cases,” Rickard notes, “the company is represented, and the person being sued is not.”
That may be because the consumer can’t afford a lawyer, which highlights a significant difference between the civil and criminal court systems: Although in criminal cases everyone has a right to a court-appointed attorney, the same is not true in civil court. And, Rickard says, the data shows that people represented by a lawyer in civil court are more likely to win their case or reach a settlement than people without legal representation. This gap—between how courts ideally would render justice and the reality for so many defendants—is known as the justice gap.
It has become a growing concern in many states, including Texas—one of the leading states in gathering data to document the problems and concerns.
“At the end of the day, you want the public to think to themselves, ‘Thank goodness for the courts. They’re doing their job, they’re fair to everybody, they’re there when we need them,’ ” says Texas Supreme Court Chief Justice Nathan Hecht, who also heads the Conference of Chief Justices, an organization made up of the highest-ranking judicial officer in every state. “We want people instinctively to feel that. Justice is not just about efficiency. Justice is a moral virtue, and people need to feel in their hearts that justice is being done. It’s very important to do all you can to maintain public trust and confidence in the justice system.”
The Pew project is analyzing data from state and local civil courts—including those in Texas—and working with partner organizations to make recommendations to help narrow that gap.
A May 2020 Pew report identified three initial steps that states could take to improve the handling of debt collection cases:
The end goal of the project, Rickard says, is to make the civil legal system more accessible, equitable, and transparent. That goal shows how the project has evolved since it was first created in 2018. Originally, the team’s work focused on how technology could expand public access to the court system and help settle legal disputes in a timely way. But project research led the team to broaden its scope.
Rickard and her team have started to take on guardianship issues and evictions—but they are primarily focused on debt cases for now, working with state policymakers and providing information and analysis to a handful of states to help them explore how debt collection plays out. The team is also looking at possible solutions: for example, re-evaluating how courts might use technology to improve their processes and policies to make them more equitable.
The project has been working with partners in several states that are leading modernization efforts in their court systems, including Utah. Hardly any defendants have representation in civil legal cases in Utah, according to “The Justice Gap,” a report commissioned by the Utah Bar Foundation and published last year; in fact, the report found, in 62,000 recent debt collection cases in the state, nearly 100% of petitioners had lawyers, compared with only 2% of respondents.
The foundation’s executive director, Kim Paulding, says that’s because “people can’t afford to hire representation. There aren’t enough services through the legal aid agencies for debt collection defense. And the nonprofit agency that’s doing the most legal aid work, People’s Legal Aid, literally came into existence in May of 2020.”
People’s Legal Aid provides free legal services to Utahns facing eviction and debt collection lawsuits. Executive Director Jeff Daybell recalls a recent landlord/tenant case in Salt Lake County, a dispute over damage to a rental property. Utah allows landlords six years to bring a case. “We don’t even save our tax information for that long,” Daybell says. “Who saves photos of move-in condition and move-out condition for six years?”
Three years after the tenants moved, the landlord sought damages that the tenants considered excessive. With free legal aid, “the amount they settled for was likely closer to what they owed.”
People’s Legal Aid offers its services on a sliding scale. They are free of charge for many clients. Others pay $225 or less, Daybell says. And the value of that legal help is clear. “We have found that having an attorney saves our average client $2,661.55. Aside from the monetary benefits, having an advocate helps them feel they are heard in court and they are significantly less anxious about the process.”
That process is complicated in Utah by the distance between home and courthouse. Throughout the United States, some defendants in civil lawsuits don’t have the means, the transportation, the time off from work, or the child care necessary to attend a court hearing. But in relatively large and sparsely populated Utah—fewer than 10 states have lower population densities—distance can be a true barrier.
That’s where technology can come into play. Utah is among the leading states in the adoption of online dispute resolution (ODR)—an internet-based platform that takes the place of in-person hearings, mediation, or arbitration. Essentially, ODR allows people to take part in court business without having to travel to the courthouse.
Pew’s court modernization project is studying Utah’s ODR platform together with the Utah Administrative Office of the Courts and the Innovation for Justice program at the University of Arizona College of Law.
“With Pew’s help, we are implementing some user analysis of the ODR platform,” says Utah Supreme Court Justice Constandinos Himonas. “The ultimate vision for the platform is to have a robust ability for people to get information about their claims and their defense, to have access to lawyers and to others who are licensed to provide assistance, and access to articles and resources that they can use to get help for their claim.”
Although ODR has improved court efficiencies in Utah, it hasn’t reduced the default rate in the state’s civil legal cases.
But with “Pew shining a light on the access-to-justice crisis, it becomes part of the national conversation,” says Justice Himonas. “I believe there’s been a real change. Judiciaries are paying more attention. Everybody’s now asking questions and exploring solutions.
“When we [in Utah] started down this path in 2015, we were talking about changing the legal ecosystem. It needs fundamental change, not just tweaking around the edges.”
The idea of going beyond tweaking around the edges of the civil legal system is familiar in Michigan, where earlier this year the state Supreme Court formally created the Justice for All (JFA) Commission. The commission isn’t shy about its goal: to provide 100% access to the civil justice system and close the state’s justice gap.
“All Michigan residents must have equal access to our courts and to resources needed to navigate our justice system, regardless of who they are, what they earn, or where they come from,” Chief Justice Bridget M. McCormack said in announcing the JFA Commission.
Chief Justice McCormack and Jennifer S. Bentley, executive director of the Michigan State Bar Foundation, have invited Pew to participate in JFA working groups on eviction and debt collection.
“In Michigan, the court’s willingness to sit at the table with other legal system stakeholders, including the bar association and legal service providers on the ground, is a real strength,” says Pew’s Rickard. “The next step is how to hold up that model with other states.” She adds that “Michigan is also one of the top states in using technology to help people resolve disputes.”
Another Michigan innovation is the state’s Eviction Diversion Program (EDP), a temporary program created in response to the pandemic to provide a way for residents who were at risk of eviction to work with their landlords to find a mutually agreeable solution. The legislature designated federal COVID relief funding for the program.
Of the 5,223 people threatened with eviction and then represented by the program in the last six months of 2020, 97% had their eviction prevented.
Bentley, of the state bar foundation, remembers one EDP case in particular: A 50-year-old woman was laid off for missing work after contracting COVID-19, and then had her unemployment benefits delayed. Last fall, she fell behind in rent payments on the apartment where she had lived for three years. A legal aid provider persuaded her landlord to participate in the EDP, which provided legal assistance as well as financial help for rent, and was able to negotiate a settlement. The renter paid $355 of her own funds for uncovered back rent and from the program funding was awarded $3,500 for her back rent and $1,200 for future rent. The eviction case was dismissed.
“While she did eventually receive her unemployment benefits and is back to work now, the rental assistance allowed her to remain housed and get back on her feet,” says Bentley. “There wasn’t a dry eye in the courtroom when she thanked the judge, the attorney, and the landlord for helping her get through such a difficult time.”
Kathleen Cahill is a Maryland-based writer and editor.