PLEASE NOTE:  Publication for public comment is not, and shall not, be construed as a recommendation or approval by the Board of Trustees of the materials published.

SUBJECT:

Proposed Modification to Notice of Client’s Right to Arbitration form

BACKGROUND:

Pursuant to Business and Professions Code section 6200, et seq., the Board of Governors is charged with establishing, maintaining and administering a system and procedure for the arbitration of disputes concerning fees, costs, or both, charged by attorneys for their professional services. Business and Professions Code section 6201(a) requires that before or at the time of service of summons or claim in an action or other proceeding against the client for recovery of fees or costs, the attorney must provide written notice to the client. The written notice “…shall be in the form that the board of governors prescribes, and shall include a statement of the client’s right to arbitration under this article. “ (Bus. & Prof. Code § 6201(a).) The Notice of Client’s Right To Arbitration was last revised by the State Bar Board of Trustees in April, 2007.

DISCUSSION/PROPOSAL:

The form is entitled “Notice of Client’s Right to Arbitration.” The first proposed modification is to include a reference to fee arbitration in the title. The proposed new title would read “Notice of Client’s Right to Fee Arbitration.” The CMFA recommends this addition to the title as a point of clarification.

The second proposed modification to the title includes adding an asterisk to the word “client’s” in the title (“client’s*”). The asterisk is included to help identify who may request arbitration in dispute over legal fees and costs. In the footer of the form, the following language is included to define the asterisk:
“*The request for arbitration may also be made by a person who is not the client but who may be liable for or entitled to a refund of attorney’s fees or costs.”

This modification clarifies that not only is the client entitled to seek to arbitrate a fee dispute, but a third party payor may also request fee arbitration. This change is made to comply with Standard 13 State Bar Guidelines and Minimum Standards for the Operation of a Mandatory Fee Arbitration Program which states, in relevant part:

“The request for arbitration may be made by (i) a person who is not the client but who may be liable for or entitled to a refund of attorney’s fees or costs (“non-client”), or (ii) the attorney claiming entitlement to fees against a non-client…”

The proposed additional language is consistent with the language in Minimum Standard 13 which was modified by the State Bar Board of Governors on July 27, 2007 in light of Wager v. Mirzayance (1998) 67 Cal. App. 4th 1187. Wager found that the attorney must give notice of right to fee arbitration not only to the person “who directly benefits from the attorney’s provision of legal services”, but also the person “who is the attorney’s debtor on account of the services provided… .”

Modification of language referencing the correct local bar program

The current version of the form contains language which identifies the local bar association that the client can contact to initiate the arbitration process. When an attorney sends this notice to their clients, the attorney fills in the contact information for a local bar association that has jurisdiction over the fee dispute. This language is intended to be helpful to the client. It currently reads:

“The address of the arbitration program you should contact is:”

This language is appropriate when there is only one fee arbitration program in the county where jurisdiction lies. However, in certain counties, (ie. Los Angeles County), there may be more than one program available to the client. The form does not make that clear. In order to avoid the situation where the attorney is selecting a specific program when there may be several programs available to the client, the language above is replaced with the following:

“The arbitration program listed below is available to you:”
“You may wish to check the State Bar’s website at www.calbar.ca.gov to see if there are other programs available to you.”

This language provides the client with contact information of a local program, but also informs them that they may wish to check to see if there is another program that might provide them with the services they seek.

Non-substantive modifications

Two other modifications are proposed, which are not substantial in nature.

The first non-substantive modification would add the State Bar seal to the form. This will help ensure that attorneys use the form as prescribed by the State Bar Board of Trustees pursuant to Bus. & Prof. Code 6201(a)2, and not a modified version of the form.

The second non-substantive modification adds the word ‘mandatory’ to the phrase “State Bar Approved Form” in the footer of the document. The intent of this modification is to help ensure that attorneys use the form approved by the Board of Trustees and not a modified version.

ANY KNOWN FISCAL/PERSONNEL IMPACT:

None

ATTACHMENT:

None. To receive the Proposed Notice of Client’s Right to Arbitration form, please contact Susan Carlson at susan.carlson@calbar.ca.gov.

SOURCE:

Committee on Mandatory Fee Arbitration

DEADLINE:

December 3, 2012

DIRECT COMMENTS TO:

Susan Carlson    
Mandatory Fee Arbitration
180 Howard Street, 6th Floor
San Francisco, CA 94105
FAX: (415) 538-2335
Susan.carlson@calbar.ca.gov