Arbitration Clauses in Family Law Attorney Fee Agreement

• Publication year: 2017
• Author: Daniel J. Horwitz, Esq.

Arbitration Clauses In Family Law Attorney Fee Agreement

Daniel J. Horwitz, Esq.

Daniel J. Horwitz practices collection law in San Diego, with a focus on assisting family law attorneys. He has served as an arbitrator with the San Diego County Bar Association for over 25 years and has participated as an attorney or arbitrator in over 500 fee disputes. Mr. Horwitz received the 2002 "Outstanding Bar Arbitration Panelist" award and currently serves on the Lawyer Referral and Information panel. He has extensive experience consulting on lawyer fee retainer agreements and has served as an expert witness and consultant on collection issues, including assisting the Southern Poverty Law Center, and on the Fair Debt Collection Practices Acts.

There are two separate arbitration systems to consider when drafting a retainer agreement and collecting a fee. The first is the client's absolute right to nonbinding mandatory fee arbitration under Business and Professions Code section 6200 et seq. Fee arbitration is mandatory for the lawyer if the client requests it. Dispute types are limited to fee disputes and the arbitrations are conducted through the state or local Bar Associations. Volunteer arbitrators are selected by area bar associations. The San Diego County Bar Association charges a 5% fee with a minimum fee of $75 and a maximum of $5,000 for up to three hours of arbitration time. If the amount in controversy exceeds $25,000, a panel of three arbitrators is appointed, including two lawyer arbitrators and a volunteer lay arbitrator, usually from the general business community. These arbitrations are only binding if both parties agree to binding arbitration after the fee dispute has arisen.¹

If either party has declined to agree to binding arbitration, the parties have thirty days from the mailing of the arbitration decision by the facilitating bar association to challenge or otherwise reject the award and request a de novo hearing. If no party takes the necessary action to seek a trial de novo, the award automatically becomes final and enforceable.

Ten days after receipt of a binding, final, enforceable arbitration award², or thirty days after receipt of a non-binding arbitration award, where there is no challenge to the award, a petition can be submitted to the court seeking to enter the award as a judgment.³Judicial Council form ADR-106 is the proper form for petitioning to confirm an arbitration award and enter judgment thereon. The petitioning party is required to pay a "first paper" filing fee to the court, which is thereafter recoverable as a cost of suit.

California Code of Civil Procedure section 1290.4(a) states: "A copy of the petition and a written notice of the time and place of the hearing thereof and any other papers upon which the petition is based shall be served in the manner provided in the arbitration agreement for the service of such petition and notice." However, with mandatory fee arbitration, if the losing party has not previously appeared in a...