The State Bar seeks public comment on a proposal to amend the rules permitting arbitrator compensation by clarifying that arbitrator compensation is discretionary and not required. In addition, the revisions describe the procedure an arbitrator must follow in order to receive compensation.
Pursuant to Business and Professions Code section 6200, some local bar associations, as well as the State Bar of California, offer a fee arbitration program to hear disputes regarding an attorney's fees for legal services.
The State Bar of California has adopted Model Rules of Procedure for Fee Arbitrations (Model Rules) which are intended to promote uniformity and procedural consistency among local bar programs, and ensure that programs are in compliance with applicable statutes, the Guidelines and Minimum Standards for the Operation of Mandatory Fee Arbitration Programs, and developments in the law. Separately, the State Bar of California has adopted rules for arbitrations conducted by the State Bar Fee Arbitration program.
Both the Model Rules and the State Bar Rules contain a provision for the compensation of the arbitrator. This provision is found in Rule 38.1 of the State Bar of California Model Rules of Procedure for Fee Arbitrations, and State Bar Rule 3.536(E). The Model Rule currently states that an arbitrator is not entitled to compensation for his or her services unless the hearing extends beyond four hours; and, "unless waived in writing," each arbitrator will be compensated at the rate of $150 per hour for each hour after a four hour hearing.
This proposal recommends modifying Model Rule 38.1 to clarify that in order for an arbitrator to receive compensation, not only must the hearing last more than four hours, but the parties must also agree to the compensation in writing prior to the taking of evidence. This proposal also adds a sentence to further clarify that the overall length of any arbitration hearing is to be determined by the arbitrator without regard to the issue of compensation for hearings that extend beyond four hours.
This proposal recommends making the same corresponding revisions to State Bar Rule 3.536(E), which addresses arbitrator compensation for arbitrations conducted by the State Bar Mandatory Fee Arbitration program.
Regulation and Discipline Committee
July 8, 2019
Office of Professional Competence, Mandatory Fee Arbitration Program
180 Howard Street
San Francisco, CA 94105
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