The Florida Bar
Bar Issue Papers
Attorney Fee Arbitration
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II. Bar Position
IV. Facts and Statistics
The Florida Bar's Lawyer Regulation Department routinely received complaints involving fee disputes between attorneys and clients but had no jurisdiction over such matters unless the fee charged was clearly excessive, illegal or prohibited by rule. Such a result left consumers with no place to turn but to the court system to resolve these disputes.
The Bar decided to take a more active role in resolving fee disputes by proposing uniform, voluntary fee arbitration throughout the state. Previously, the only fee arbitration in Florida was offered by 14 voluntary bar groups. In areas where no voluntary bar offered fee arbitration, the service was not available. On April 6, 1989, the Florida Supreme Court approved a petition by The Florida Bar to establish a statewide fee arbitration program.
The statewide fee arbitration program coordinates and promotes the fee arbitration system, provides an alternative for individuals to resolve their fee disputes, gathers and maintains vital statistics and other information from circuit arbitration committees.
II. Bar Position
A. American Bar Association Position
In the mid1970s, a Special Committee on Fee Disputes (a subgroup of the Section on Bar Activities and Services) developed "The Resolution of Fee Disputes," a report and model bylaws for fee arbitration. In 1992, the ABA House of Delegates adopted the Report on Evaluation of Disciplinary Enforcement which recommended mandatory fee arbitration. In 1993, the ABA Joint Subcommittee on Lawyer Regulation asked the Standing Committee on Lawyers' Responsibility for Client Protection to draft a model for fee arbitration. The states that have mandatory fee arbitration were consulted. In February 1995, the ABA published the Model Rules for Fee Arbitration.
B. The Florida Bar Position
In 1988, The Florida Bar's Board of Governors unanimously approved a uniform statewide fee arbitration program. The Bar successfully petitioned the Florida Supreme Court for establishment of the fee arbitration program and then assigned a fulltime staff position to administer the program. The Bar's Fee Arbitration Program has been in operation since January 1990.
A. Legislative History
In a report dated June 5, 1980, the Select Subcommittee on the Legal Profession (of the House Committee on Regulatory Reform) made 22 recommendations on improving regulation of the legal profession. (This is known as the Bar's "sunset review" or the Sheldon Committee.) Recommendation 13 dealt with fee arbitration and said that the Bar should sponsor establishment of arbitration committees to mediate attorneyclient fee disputes. The committees, the commission suggested, should consist of 2/3 lawyers and 1/3 non-lawyers and should not be mandatory. "The Bar should involve itself in dealing with the issue, rather than leaving the decision whether to set up arbitration committees to the local voluntary bar associations," the report said.
B. The Florida Bar Involvement
The Bar appointed a special committee on the Arbitration of Fee Disputes in 1972. The primary goal for the committee, set by the Board of Governors, was to prepare a model fee arbitration plan for adoption by local bar associations which desired one. In 1977, the committee submitted a mandatory fee arbitration plan, under the jurisdiction of The Florida Bar, which would have required or at least strongly encouraged lawyers to submit fee disputes to arbitration. That plan was rejected by the Board of Governors and the committee was again instructed to prepare a model plan for voluntary bars. The model fee arbitration program for voluntary bars was approved by the Board of Governors in May 1978. The Bar's fee arbitration committee was then dissolved.
In 1987, a special Disciplinary Review Commission was appointed to review the Bar's entire grievance process. One component of this commission suggested changes to the Bar's disciplinary system, including the establishment of a statewide, voluntarily imposed mechanism for resolving attorneyclient fee disputes. In May 1988, the Board of Governors voted unanimously to accept the commission's proposed rules establishing procedures to provide uniform fee arbitration offered by voluntary bars throughout the state and to set up fee arbitration programs in areas of the state in which none existed. At its meeting two months later, the Board's budget committee approved the expenditure of $48,000 to operate a fee arbitration system statewide. The proposed plan was approved by the Bar's Rules and Bylaws Committee for submission to the Florida Supreme Court and the Court approved the plan in April 1989.
Under the former Fee Arbitration Rule, a ninemember standing committee was created to oversee the imposition of uniform fee arbitration procedures. Twentythree circuit arbitration committees, each consisting of at least three members approved by the Board, with at least onethird of the membership of each committee consisting of non-lawyers, handles administration at the local level. However, effective May 20, 2004 the Supreme Court of Florida amended the Fee Arbitration Rule and abolished all circuit arbitration committees. The new standing committee is comprised of eighteen members. The Board of Governors appoints the chair and vice-chair of the committee. The duties of the standing committee are to administer the program, certify arbitrators for the program, and make recommendations to the board of governors for changes in the program.
Fee disputes between attorneys and between an attorney and client are eligible for this program. Binding arbitration means that the parties agree to accept the decision of the arbitrators. In the Bar’s program, after the parties agree to arbitrate and they file the required forms with the program administrator, one or more arbitrator is chosen to hear the case. If the dispute is $2, 500 or less, one arbitrator is selected to hear the case. If the disputed amount is more than $2, 500, then a panel of three arbitrators is appointed, with at least one non-lawyer and one lawyer.
A panel or sole arbitrator would be required to hold a hearing within 45 days after receipt of the assignment and render an award within 10 days after the close of the hearing, unless extended by the chair of the standing committee for good cause.
If all parties agreed, the evidentiary hearing could be waived and arguments could be presented in writing together with exhibits, if any, to the arbitrator(s) who shall render a final decision based on the information. All parties have the right to attend all hearings and arbitrators would be able to consider all factors they deem relevant.
· At least 9 percent of the complaints received by The Florida Bar involve fees.
· All voluntary bar arbitration programs merged into the Bar's statewide program.
· Twentyeight states and the District of Columbia have statewide arbitration systems. Local bar associations have Attorney Fee Arbitration Programs in 13 other states. Most are voluntary. (Source: National Law Journal, April 8, 1991)
· States with mandatory arbitration systems include Alaska, California, Maine, Minnesota (pilot program), New Jersey, New York (matrimonial cases), North Carolina, South Carolina, and Wyoming (contingency fees only).
Prepared by The Florida Bar Department of Public Information and Bar Services with the assistance of the Lawyer Regulation Department.