Fee Arbitration Procedures

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 Fee Arbitration Procedures

Clients sometimes feel that their attorney’s legal bills should be lowered, while the attorney might believe the fee is reasonable.

When a disagreement occurs regarding the legal bill, both parties can submit their dispute to a fee arbitration program. This program uses a fee arbitration procedure to resolve disputes. The arbitration is carried out by a neutral third party who will review evidence from both the client and the attorney before determining the appropriate fee.

Most states offer some type of fee arbitration program. In some states, participation is voluntary, while in others, such as New York, New Jersey, and California, fee disputes must be submitted to arbitration.

Each state’s arbitration procedure, whether mandatory or voluntary, generally involves similar steps.

Is Written Notice Required to be Provided to the Client?

If the attorney and client cannot agree on the fee, the attorney must send a written notice to the client, informing them of their right to arbitration. Many states with an arbitration procedure require attorneys who agree to arbitrate to provide this notice.

This notice usually contains the following information:

  1. A statement of the client’s right to arbitrate;
  2. A statement that the client has a specific time frame to file an arbitration claim;
  3. An explanation of how to initiate a fee arbitration; and
  4. A copy of the form the client must complete to start the arbitration process, typically called a “request for arbitration” form.

What is Necessary to File the Request to Arbitrate?

If the client wishes to proceed with arbitration, they must request arbitration with the arbitration body that has jurisdiction over the dispute. The attorney must also receive a copy of the request.

Many states require the client to submit evidence along with the request, which may include the following:

  1. A copy of the fee agreement between the client and the attorney;
  2. Copies of all legal bills sent by the attorney to the client;
  3. Copies of receipts and canceled checks; and
  4. Copies of documents and correspondence related to the dispute.

Some state arbitration procedures allow an attorney to respond to the arbitration request. A response may include a statement outlining areas of agreement and disagreement and an explanation of why the attorney believes the fee is appropriate. Any response from the attorney must also be provided to the client.

How are Arbitrators Chosen?

After the lawyer and client submit their documents, the arbitration body overseeing the process reviews the submissions. This review process ensures that all necessary information and evidence have been provided and that both parties have complied with the requirements of the arbitration procedure.

Upon completion of the review, the arbitration body selects the arbitrator or arbitrators who will preside over the dispute. The selection is typically based on the arbitrator’s expertise, experience, and knowledge of the specific area of law involved in the dispute. In some cases, the arbitration body may choose a panel of arbitrators, usually consisting of three members, to ensure a fair and balanced decision-making process.

Once the arbitrator or panel of arbitrators has been chosen, both parties are given the name(s) of the arbitrator(s) along with a brief summary of their background and qualifications. This disclosure allows both the lawyer and the client to assess whether the arbitrator(s) is impartial and free of any conflicts of interest.

If either party believes the arbitrator(s) is biased or has a conflict of interest, they can request the removal of the arbitrator(s). This request must be made within a specific time frame, usually outlined in the arbitration rules, and accompanied by a detailed explanation of the reasons for the perceived bias or conflict of interest.

For example, suppose the client discovers that the selected arbitrator had previously worked as a partner in the same law firm as the attorney involved in the fee dispute. The client might reasonably question the arbitrator’s impartiality due to their past professional relationship with the attorney. In this case, the client could request the arbitrator’s removal and ask the arbitration body to appoint a new, impartial arbitrator.

Upon receiving a request for removal, the arbitration body will evaluate the provided reasons and determine whether the concerns raised are valid. If the arbitration body agrees that the arbitrator’s impartiality is in question, it will remove the arbitrator and appoint a new one. The new arbitrator will then be subject to the same disclosure and review process, ensuring a fair and unbiased arbitration process for both parties.

Arbitrator removal requests should be made in good faith and based on legitimate concerns. Frivolous or baseless requests may be denied and potentially harm the requesting party’s credibility during the arbitration process.

What are Some Aspects of the Hearing Process?

Once the arbitrator is assigned, they schedule the time and location of the hearing. Depending on the nature and size of the dispute, the hearing may occur before a panel of arbitrators, usually consisting of three members. Each party is typically allowed to have their own attorney represent them.

The arbitrator conducts the hearing at the scheduled time and location. Both the lawyer and client can participate by offering testimony and documentary evidence. If one party does not attend the hearing, the arbitrator generally allows the other party to present their case and decide based on all available evidence.

How are Disputes Resolved?

After the hearing concludes, the arbitrator reviews the evidence. The time it takes for a decision to be issued depends on the amount of evidence and the complexity of the dispute. Most states require a written decision to be issued within a certain time frame after the hearing (e.g., 30 days).

The written decision provided to the parties explains the reasoning behind the ruling. Generally, the written decision is final and binding, with only limited rights of appeal. Appeals can typically be made by filing a suit in the appropriate court within the time frame outlined in the decision.

What Happens if the Lawyer Refuses to Participate in Arbitration?

In states with an arbitration program that doesn’t require mandatory attorney participation, the client usually must resort to filing a lawsuit. This is because states without mandatory attorney participation typically do not penalize a lawyer for not participating. Additionally, these states do not allow a client to receive an arbitration award unless both parties initially participated in the arbitration.

Do I Need a Lawyer to Assist Me with Fee Arbitration?

If you wish to recover what you believe are excessive legal fees through arbitration, it is advisable to consult an attorney. An experienced attorney can inform you about your rights, help you prepare for the hearing, and represent you during the hearing.

LegalMatch is an online legal matching service that can help connect you with experienced attorneys who handle fee arbitration cases. You can receive free attorney referrals from lawyers in your area who have experience with fee arbitration cases by submitting a brief description of your case on LegalMatch’s website. If necessary, These attorneys can review your case, provide legal advice, and represent you during the arbitration hearing.


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