Fee Arbitration
by G. Steven Sullivan
One of the big challenges of private practice is an unhappy client. One of the more emotional issues is a controversy over the lawyer's fee.
A fee dispute generates a unique set of issues for both the lawyer and the client. For the average legal consumer, the attorney fee is one of the most important factors in the legal relationship.
Fee disputes arise in all practice areas. Most lawyers set out in writing the fee arrangement. Nonetheless, lawyers and clients can disagree on the number of hours that should have been billed, when a lawyer's time should be billed, timing of billing statements, etc. Often, lawyers have the obligation of continuing to represent a client that has not kept a legal bill current. Lawyers have the ethical complications of how and when to institute collection actions against a past and present client. Oftentimes, a collection action filed by the lawyer is met with a complaint to the Office of Professional Conduct filed by the past client.
Several years ago, the Utah State Bar established the Fee Arbitration Committee. The Utah Supreme Court approved needed rules to govern the arbitration process. Those rules can be found on the web site for the Utah State Bar.
Importantly, either the lawyer or the client can request use of the arbitration process. However, both parties must agree to be bound by the arbitration decision. In the event one party or both will not agree to be bound to the arbitrator's award, mediation services are also available through the committee.
Part of the application process is to frame the amount of the fee dispute. If the fee dispute is $1,500 or less, a single arbitrator will be assigned. Otherwise, a panel of three is available, made up of a lawyer from the committee, a judge, and a lay person from the community.
Once assigned, the single arbitrator, or the lawyer acting as the chair of the arbitration panel, will schedule a hearing date, will resolve any discovery disputes, and will rule on any evidentiary issues.
The parties to the arbitration are encouraged to provide documentation prior to the hearing. The hearing itself is informal in nature, with rules of evidence being construed liberally. The hearing is typically kept fairly short in duration, toward promoting the goal of efficient administration of the case.
Any award entered in the arbitration process can be docketed as a judgment in the district court.
The Fee Arbitration Committee is prevented from adjudicating disputes collateral to a disputed fee. That is, issues of professional negligence and issues that might otherwise surround a disputed fee, but are, in fact, not part of a fee dispute, cannot be heard by the committee.
Grounds to modify an arbitration award are extremely narrow in scope. A party can ask the arbitrator or arbitration panel to modify an award when (a) there are evident miscalculations of figures or descriptions of a person or property, (b) the award is imperfect as to form, or (c) the award requires clarification.
Use of the Fee Arbitration Committee process generates several benefits to the involved lawyer and to the Bar in general.
The lawyer has the ability to adjudicate a fee dispute without dragging a client through a court of law. Many lawyers have foregone collection of an earned fee because of the hassle, time and energy of litigating a fee dispute through the courts.
The legal profession has the ongoing challenge of maintaining a positive public image. Having members of the Bar use the courts to collect fairly-earned fees only adds to the Bar's public image concerns.
The biggest benefit of all goes to the client. As noted, it is difficult for a lawyer to drag a client through the courts. However, for the average consumer of legal services, it is, from an economic and pragmatic standpoint, very difficult to litigate a fee dispute with the lawyer through the courts. As a profession, lawyers should promote a client's ability to challenge a disputed fee through a process that is fair and efficient to the client.
The fee arbitration process repeatedly generates a very significant benefit of getting the client and the lawyer in the same room to listen and consider the concerns of the other person. Through hearing each other out in the structure of an arbitration hearing, many times the dispute is resolved without the arbitrator entering an award. Where an award is entered, both parties have a much better understanding of the basis for the other party's claims. The natural emotions and bad feelings that otherwise exist in a fee dispute are often resolved or substantially lessened through the arbitration process.
The Bar liaison for this program is Christine Critchley, (801) 531-9077. Christine can answer any questions the lawyer or client may have about the arbitration process.
We encourage Bar members to educate your clients about the fee arbitration option and make to use of the Fee Arbitration Committee.