Arbitration programs resolve fee grievances between
attorneys and clients
By Amy Yarbrough
Staff Writer
When Mary (not her real name) got into a dispute with her
former lawyer over his bill for representing her in a suit against her condo
association, she felt stuck, unable to afford to hire another attorney to fight
it.
But things began to look up when she participated in the
State Bar’s Mandatory Fee Arbitration Program, one of a number of programs in the state that resolve the
most common complaint clients have about their attorneys: their fees and costs.
Twenty-nine counties in the state have mandatory fee
arbitration programs. Some have more than one. In all, there are 36 mandatory
fee arbitration programs in California including the one run by the State Bar,
which steps in whenever there’s a conflict or if the county where the dispute originated
doesn’t offer fee arbitration.
Mary, who asked that her name not be used, said that although
she feels she ended up paying more than she should have, it was nice to have
someone with legal expertise involved “who wasn’t connected with the case so I
could have more insight.
“I felt positive,” said Mary, who ended up having $1,200 knocked
off her bill. “When we went into the office, I felt like I had more power.
Here, now I have someone who knows the law like you do.”
William Bachrach, her former lawyer, said he also found it
to be a good experience.
“I was particularly impressed with the fee arbitrator in our
case because of the great detail she went into,” said the Oakland attorney, who
himself served as an arbitrator for the Alameda County Bar Association for many
years. The bar association has since discontinued its program.
“I think, this case in particular, the client does not
understand what all goes into these things,” he said, noting that his former
client was given a good opportunity to tell her side. “It couldn’t have been
more pleasant in the arbitration.”
Designed to be less costly and formal as well as faster than
other proceedings to resolve disputes, mandatory fee arbitration dates back 35
years in California. In 1979, a law was enacted requiring the State Bar to
create a program to arbitrate fee disputes and mandating that attorneys provide
clients with a notice
of a client’s right to fee arbitration prior to initiating any proceeding
to collect fees or costs.
In any given year, 1,100 to 1,500 fee disputes are heard by
programs throughout the state, which means that those matters are most likely being
kept out of the court system.
In general, arbitrations must be heard in the county where
the legal services were rendered and the programs charge a percentage of the
amount in dispute, according to Doug Hull, director of the State Bar’s Mandatory
Fee Arbitration program. The State Bar’s filing fee, for example, is 5 percent
of the amount in dispute, with a minimum of $50 and a maximum of $5,000. The
fee is paid by the requesting party, usually the client. However, the law
allows the arbitrator to divide the fee between the parties.
As far as the State Bar’s program goes, disputes involving
less than $500 are reviewed without a hearing, while those involving $500 to
$1,000 are resolved based on submitted evidence or through a telephonic hearing.
Disputes involving between $1,000 and $15,000 are heard by a sole arbitrator,
while three-member panels hear those more than $15,000.
The program is confidential, and arbitrations are
non-binding by default. Either party can seek trial de novo or private
arbitration within 30 days of the award, but after that the award becomes
binding.
Ideally the arbitrator will host the arbitration at his or
her office although there have been instances where court facilities or library
space was used.
“A neutral venue is always what we strive for,” Hull said,
adding that having an outside party involved can also have a calming effect.
“By the time a matter has gone to fee arbitration, the
parties are at odds. It can be very contentious,” he said.
“If there’s some air of authority it helps tamp down the
emotions that can flare up.”
According to Hull, 450 volunteers participate in the State
Bar’s program. Some do it because they want experience as a neutral, but
most volunteer out of a commitment to public service.
Despite its seemingly hearty ranks, the State Bar’s program
is always in need of more volunteers, Hull said, particularly those based north
of Sacramento and other less-populated counties. The State Bar will be hosting
a fee arbitrator training program for all current and prospective volunteers on
July 23 in Los Angeles.
Scheduled from 2 to 5 p.m. at the State Bar’s office at 845
S. Figueroa St., the program is for all prospective and current volunteers who
arbitrate attorney-client fee disputes through the programs offered by the local
bar associations and the State Bar.
Members of the State Bar who participate in the training
will receive 2.75 hours of Minimum Continuing Legal Education (MCLE) credit,
including 1 hour of legal ethics. To reserve a space, email the State Bar at feearb@calbar.ca.gov. For additional
information, contact Hull at 415-538-2015.