Solving fee disputes can avoid lawyer malpractice claims

Perhaps, one of the most common issues that attorneys have with clients is fee disputes. Indeed, many, if not most, complaints filed against attorneys revolve around fees. As a result, the California Bar created the Mandatory Fee Arbitration Program to help solve these issues without the need to resort to litigation or malpractice claims.

Mandatory Fee Arbitration Program

The MFA program is a confidential, low-cost and informal fee dispute resolution process for attorneys and their clients. Once a client requests arbitration, the lawyer must participate. In this process, an arbitrator (a neutral third-party) decides the merits of fee, including whether they are reasonable and if they are owed. Depending on the amount in dispute, either one arbitrator or a panel of three arbitrators will hear the facts from both sides. The arbitrator may decide that the client paid too much and order the attorney to refund fees. And, the maximum any client will pay is the fees outlined in the fee agreement, regardless of any additional fees incurred by the attorney during their collection attempts.

Notice required

If one of our attorney clients believe they have an outstanding fee or cost that their client refuses to pay, the attorney must provide that client the California Bar’s “Notice of Client’s Right to Fee Arbitration” form before filing any proceeding to collect those fees or costs. The client then has 30 days from receipt to ask for arbitration, including paying the filing fee to the appropriate MFA program in their area.

Binding?

Unlike most other arbitration proceedings, unless both parties agree, the MFA program is nonbinding, meaning it can be appealed to the Superior Court. This means not responding to a request to make the arbitration binding has the effect of keeping the arbitration nonbinding.

The takeaway

While the MFA program may seem like a hoop our Los Angeles, California, attorney readers must jump through to get a client to pay what is owed, it can be a great way to resolve a dispute without getting a complaint filed. In addition, it allows for a neutral third-party to determine what is reasonable, given all the facts of the case.