Opinion ID: 2261551
Heading Depth: 2
Heading Rank: 1

Heading: The Compulsory Nature of R.1:20A

Text: The Association maintains that it is unnecessary for R. 1:20A arbitration to be compulsory for attorneys because the courts, particularly the equity courts, provide clients with an adequate forum in which to settle their grievances over attorney fees. We disagree. We concur fully with the findings of a 1974 Report by the American Bar Association that forcing clients to go to court to resolve attorney fee disputes places a heavy burden on the clients. ABA, Report of the Special Committee on Resolution of Fee Disputes 2-4 (1974) (Report). Clients, especially those of limited income, often find it very difficult to procure another attorney to represent them in fee disputes. Also, if a client were forced to give the attorney a retainer that eventually proved to have been unreasonably high, the client might not be able to afford the delay of another trial before being reimbursed. As the ABA Report concluded, imposing these burdens on clients causes immeasurable harm to the relationship between the Bar and the public. Id. at 3. The Association also contends that even if some form of arbitration is necessary for fee disputes, it need not be compulsory because attorneys will usually consent to participation in a fair arbitration process. The record wholly disproves this contention. According to the Report, national surveys demonstrate that a significant and growing number of attorneys refuse to arbitrate their fee disputes. Id. at 4. Some refuse because without arbitration the client is at a serious disadvantage. Referring to the problems mentioned above which clients face in fee disputes, the Report notes: In view of these tremendous practical obstacles facing the dissatisfied client, it is hardly surprising that the less conscientious lawyer usually refuses to consent to binding arbitration. By the simple act of declining to submit to arbitration, this attorney can thwart the organized Bar's jurisdiction to consider the dispute and to implement a fair resolution. Id. at 2-3. Finally, the Association contends that compulsory arbitration has disadvantages which outweigh any gains to be had from it in protecting clients. It relies upon the conclusion of the ABA Report that although some form of fee arbitration is desirable, compulsory arbitration is not a good idea. Id. at 4. We find the Report's reasons for rejecting compulsory arbitration unpersuasive. The ABA Report cites two principal problems with a compulsory arbitration scheme: that it would be too controversial to ever be enacted, and that it would in essence be treating lawyers as second class citizens. Id. The first problem is, of course, moot in New Jersey after our promulgation of R. 1:20A. We see little merit in the ABA's second objection to compulsory arbitration. Lawyers have many rights and privileges as members of the New Jersey Bar and we find no difficulty in imposing a concomitant responsibility upon them to submit to arbitration of fee disputes when such arbitration is necessary to maintain public confidence in the Bar as a whole. Further, as discussed infra, we find the R. 1:20A arbitration scheme to be fair to both clients and lawyers. We conclude, therefore, that the ABA Report's strong arguments for having attorney-client disputes arbitrated support the establishment of a compulsory arbitration scheme despite the ABA's own reservations about such a scheme. [26] Our commitment to the Committees as presently constituted is buttressed by the fact that the agencies are effectively fulfilling their function. We note first that there is no evidence that the compulsory arbitration scheme in practice is causing significant problems for lawyers. [27] Further, and more importantly, we find that the Committees have fairly and expeditiously adjudicated attorney-client fee disputes which would otherwise have either resulted in protracted litigation or in disgruntled clients giving up their claims. [28] Thus, we enthusiastically reaffirm our commitment to the compulsory arbitration scheme established by R. 1:20A.