April 15, 2006 (Original publish date) • By Dennis Beaver
I received a notice from my former attorney that tells me I need to participate in fee arbitration or he will file suit against me in Small Claims Court. Can you tell me what to expect, and how the Fee Arbitration is conducted? Is it true that another lawyer will be the arbitrator, for if so, that has me worried, as I am of the opinion that most lawyers watch out for each other. Please pardon my sarcasm, as it is not directed against you in any way but I have not had many positive experiences with the legal profession. Thanks for you advice — Monica from Arcata, Calif.
WHAT IS FEE ARBITRATION?
The State Bar of California Mandatory Fee Arbitration Program helps prevent lawyers and clients from winding up in court over fees and costs. This involves having experienced lawyers, and at times a panel of lawyers and members from the community, sitting as arbitrators. I have often served as arbitrator, and will tell you that if there is any profession on earth that does not watch out for each other, it is ours. Just ask KFI radio personality Bill Handel, Esq.
In his excellent (and hysterically funny) weekly, syndicated program “Handel on the Law,” Bill often states, “Lawyers are like mother alligators — they will eat their young. Given the chance to find fault and sue for legal malpractice, there is no such thing as protecting your fellow lawyer.” I have never seen the kind of “let’s watch out for each other” situation that Monica fears.
Fee Arbitration is a straight forward and simple procedure. Boiled down to its basics, before a lawyer is allowed to proceed to court to collect attorney fees or courts costs, the client must be given notice of the right to have the dispute taken to arbitration. It’s not mandatory; a client is not obligated to go through the process, but it has proven to be an effective way of resolving these matters at minimal cost. If not offered to the client, an attorney is prevented from going to court even if suit has been filed. The cost of arbitration is incredibly low in relation to what the client and lawyer receive.
Fee Arbitration can be binding or non-binding; it is important to understand the differences and consequences. Therefore, please view today’s story as an introduction to a procedure that I believe in and completely support. A great deal of information is available online, by going to ww.calbar.org.
WHAT’S GOOD ABOUT FEE ARBITRATION?
If you speak to the intake department at virtually any State Bar Association and ask, “What are the most frequent complaints you get from the public about lawyers?” the answer has two parts: (1) Lawyers not returning phone calls, and (2) Attorney fees. “It isn’t usually a situation of a client trying to get out of a legitimate bill, but rather a failure by the attorney to send out timely, understandable bills,” a senior complaint department employee at the California State Bar told me.
A case that I recently handled is a typical example of how fee arbitration works as well as a glowing example of one bad apple spoiling the entire barrel. For those of us who enjoy good comedy, especially where The Comedy Channel is locked into the favorites of your cable remote, if I say Abbott and Costello, chances are good that you’ll reply, “Who’s on First?” It was a portrayal of total confusion from one of our country’s favorite comedy teams. An arbitration I conducted revealed a level of confusion that made me think of that comedy sketch.
The dispute was over $500 attorney fees, past due for more than two years. Attorney Jane (not her real name) was hired to help Hector reduce past due child support. Jane was paid a $1,000 retainer; The hearing was February 10, 2004, and Jane had been aware of that date for months. Still, she scheduled a trial the same day. It would prove to be a good example of how irresponsible lawyers abuse the system and their clients.
Hector — driving six hours from Indio — was on time for the court appearance, accompanied by his ex-wife. She had agreed to drop her request for past due support, as they had patched up their relationship and she did not need the money; in less than five minutes, it could all have been on the record, but Attorney Jane never came to court that day. Instead, she sent a paralegal who told the judge “My boss is in trial and the case needs to be continued.” The judge did continue it — to May of 2004. This, of course, meant another, unnecessary six hour drive to court for Hector.
But, when May came, Hector’s ex-wife was ill and unable to come to court. Jane could have but never even tried to have her sign a document releasing Hector from the child support obligation. He was ordered to make payments. By that time, he was off work, due to an injury. Jane billed him $500 for the May appearance — he refused to pay, Jane notified him of his right to arbitrate the dispute, and he agreed to binding arbitration. I was selected to arbitrate the dispute.
4 p.m. was the time requested by Jane’s office. Hector and his ex-wife arrived early. Jane was absent. At 4:00 we phoned her office and was informed, “Oh, she is in court and can’t make the hearing. Please continue it. We can’t reach her because she is in the courtroom now.” “No, I will not continue the matter, as your office knew of this for weeks, and if she is not here by 4:15 I am starting,” I said.
We began at 4:15 without Jane. It was then that I learned what took place two years earlier, and Hector’s ex-wife again said that she wanted the arrears dropped — which she had the right to do as no welfare money was involved. With interest, it was over $40,000.
At 4:20 Jane suddenly appeared, with the excuse, “I was in court and my office was supposed to tell you that. “Yup, they sure did, and this Fee Arbitration has been scheduled for weeks and you were notified. So, the ‘I was in court’ excuse doesn’t quite fly this time. But I am ready to listen to your position,” I replied.
At once she began to bad-mouth her former client, insisting that his ex-wife be ordered out of the room. “She is staying,” I said. “These are informal proceedings, she is a witness.” Attorney Jane then read portions of a letter sent to her by Hector which contained some not too flattering remarks about his ex-wife. It was completely uncalled for — calculated to embarrass him and upset her — and took everyone by surprise. However, the greatest surprise of all was Jane’s next comment.
“What is this all about? What does he want, anyway?” “Just to not pay you any more money, that’s all,” I said. It was clear, she had not even read the Fee Arbitration documents sent to her. Hector didn’t want anything from Jane, he simply did not want to pay her any more money after causing him to come to court twice and costing him a small fortune.
It was “Who’s on First?” Jane was clueless. Upon realizing that Hector was not asking for money back, she muttered, “Well, OK, then,” slammed her briefcase shut and stormed out of my office.
I saw her in court a few days later, when she was representing family members in a conservatorship case. She didn’t know which party she was representing. You should have seen the look on the judge’s face.
My decision was brief. “Counsel has agreed to drop any demands for additional attorney fees.”
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.