November 2010 • Vol. 30 No. 10 | An E-Publication of the Los Angeles County Bar Association

Attorney Client Arbitration Program Permits Parties to Arbitrate Disputes after Exhausting Rights under Business and Professions Code

Post-arbitration alternative to trial de novo since Schatz decision

It has been well over a year since the California Supreme Court found in Schatz v. Allen Matkins that the existence of a predispute arbitration agreement does not prevent a party from entering binding arbitration after participation in mandatory arbitration. 

The dust has settled, and what has emerged is a post-arbitration alternative to trial de novo—The alternative is binding arbitration through the Los Angeles County Bar Association’s Attorney Client Arbitration Program.

Previously, a party unhappy with the mandatory arbitration result would submit a rejection of the arbitration award with the local bar association and proceed to court for final resolution of the dispute. 

Since the issuance of the Schatz decision, parties can request that the court enforce the arbitration agreement and order the parties into binding arbitration instead of trial de novo. The proceeding, based upon court order, ends up at an organization named within the agreement.

LACBA’s Attorney Client Arbitration Program permits parties to arbitrate disputes after exhausting the rights afforded them under Business and Professions Code Secs. 6200-6206. LACBA has more than 30 years of experience in resolving fee disputes, and the cost is affordable—The only fee charged to the parties is the arbitrator’s hourly rate that they share, unless the agreement otherwise states. The rules are straightforward, and the arbitrators handling these matters have the expertise necessary to resolve trial de novo issues in an arbitral setting.

Parties may initiate arbitration through the Attorney Client Arbitration Program in one of the following ways:

  • By stipulating to have all disputes between the attorney and the client resolved by arbitration before LACBA;
  • Through the service of notice of the nature of the claim and a demand for arbitration when the retainer between an attorney and client provides for binding arbitration of all disputes after exhaustion of the right to arbitration under Business and Professions Code Sec. 6200; or
  • By having in place a written retainer agreement that provides for binding arbitration before LACBA after the parties may have exhausted their rights for fee arbitration under Business and Professions Code Sec. 6200.

Most attorneys deal with the resolution of fee disputes using a clause in the retainer agreement. The organization referenced in the clause is what the court considers when ordering a matter into arbitration. Attorneys can add the following clause to their retainer agreement to use the Attorney Client Arbitration Program to handle fee disputes. The following clauses deal with disputes related to mandatory arbitration and post-mandatory fee arbitration: 

ARBITRATION:

(a) MANDATORY FEE ARBITRATION
You have the right to elect to have any dispute relating to attorney’s fees under this [contract/agreement/engagement letter] submitted to the Los Angeles County Bar Association, for Arbitration by the Attorney-Client Mediation and Arbitration Service Program pursuant to California Business and Professions Code Section 6200 et seq.

(b) BINDING ARBITRATION
In the event either of us seeks a hearing after arbitration of a fee dispute or in connection with any other dispute relating to, or arising from, our professional services in this or other matters in which we provide services to you, you and we agree that the dispute(s) shall be resolved by binding arbitration before the Los Angeles County Bar Association, in accordance with the Arbitration Rules in effect at that time, including our mutual obligations of cooperation and disclosure. IN SO DOING, WE BOTH GIVE UP OUR RIGHTS TO A JURY TRIAL AND TO AN APPEAL, EXCEPT AS PROVIDED BY LAW.

To take advantage of the Attorney Client Arbitration Program or to obtain more information, call (213) 896-6426.
 




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