If you and your lawyer have a dispute about how much you owe in lawyer’s fees or costs, the State Bar of California has a program that can help. The mandatory fee arbitration program provides an opportunity to have a neutral arbitrator or a panel of arbitrators resolve your dispute through an informal, low-cost alternative to court. The arbitration process is confidential and not open to the public.
You do not need a lawyer to arbitrate a fee dispute against your former lawyer. You may choose to hire one at your own expense to represent you at the arbitration, but that expense is not recoverable in the arbitration.
Either way, you should obtain a copy of the rules of procedure from the program handling your fee dispute to educate yourself about the process. Additional information can be found on the State Bar’s website, calbar.ca.gov, or on your local bar association’s website if it offers fee arbitration.
If a lawyer is claiming that you owe an outstanding balance of fees or costs, he or she must forward to you a “Notice of Client’s Right to Fee Arbitration” form approved by the State Bar before or at the time of filing a lawsuit or other proceeding to collect the amount. You will then have the option of requesting mandatory fee arbitration with the appropriate local bar association program within 30 days of receiving that notice, or with the State Bar if the appropriate local bar does not offer mandatory fee arbitration. If you fail to request mandatory fee arbitration within 30 days, you will have waived your right to arbitration, and the lawyer may pursue legal action or other proceedings to collect the fees or costs.
After you submit a request for arbitration form and filing fee to the appropriate program, the lawyer is provided with an opportunity to respond to your request. A neutral arbitrator or a panel of three arbitrators (depending on the amount in dispute) will be assigned to listen to both you and the lawyer and decide the appropriate fees. The arbitrator may decide that you paid the attorney more than is appropriate, and you may be awarded a refund of lawyer’s fees or costs already paid.
The arbitrator may also decide that you must pay the lawyer unpaid fees, or that neither of you owes anything further. In no event will an arbitrator order you to pay more than what you agreed to in the fee agreement.
Depending on the circumstances, the arbitrator will consider a number of factors in reaching a decision. These may include whether there was a written fee agreement; the value of the lawyer’s services; whether the lawyer spent an appropriate amount of time on your case; whether or not there are any billing errors; and whether any professional negligence or misconduct by the lawyer affected the value of the services. The arbitrator will decide the matter based on written submissions and the evidence presented at the hearing. The award will be either binding or nonbinding, depending on what the two parties choose.
If you are seeking a refund of lawyer’s fees already paid, you may request mandatory fee arbitration any time as long as your request is made within the time period allowed in which to bring a civil action seeking judicial resolution of a fee dispute (2 years for an oral contract, 4 years for a written contract). However, if an attorney has provided you with notice of your right to fee arbitration, you only have 30 days to file.
To preserve your right to arbitrate, you should file a request for arbitration promptly.
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