Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Lawyers can include arbitration clauses in retainer agreements for fee disputes and malpractice claims so long as the client consents after receiving full disclosure, an American Bar Association ethics panel concluded in an opinion released last Thursday. “It is permissible under the Model Rules to include in a retainer agreement … a provision that requires binding arbitration of disputes concerning fees and malpractice claims, provided that the client has been fully apprised of the advantages and disadvantages of arbitration and has given her informed consent,” wrote the ABA Standing Committee on Ethics and Professional Responsibility in Formal Opinion 02-425. The committee found inapplicable the proscription of RPC 1.8(h) against upfront agreements to limit malpractice exposure, because mandatory arbitration clauses do not prospectively limit liability but merely “prescribe a procedure for resolving such claims.” The enforceability of such clauses is being tested in New Jersey. Last June, Superior Court Judge Clarkson Fisher Jr. in Monmouth County upheld a clause in a fee dispute, prompting the client to appeal and to file a malpractice suit against his lawyer. Kamaratos v. Araps, MON-L-116-02; Kamaratos v. Palias, A-201-01. Bloomfield, N.J., solo practitioner Hilton Stein, the lawyer for Gus Kamaratos, calls the ABA opinion ill-advised. He says that during oral argument on April 5 on the enforceability of the clause in the malpractice case, Judge Alexander Lehrer stated that Fisher advised him that his ruling in favor of arbitration applied only to fees. Stein says he doubts the New Jersey Supreme Court would extend such clauses to malpractice itself. Thomas Roth, a West Orange, N.J., solo practitioner who does some legal malpractice defense alongside his mainly criminal defense practice, agrees that the courts are not likely to uphold arbitration provisions for malpractice claims. “There’s a big difference between going before a jury with a legal malpractice claim and going before an arbitrator,” says Roth in disputing the ABA committee finding that it’s only a matter of procedure. Roth doubts lawyers will be eager to embrace arbitration clauses even with the ABA imprimatur. “I wouldn’t want to be in the position where I have to raise the specter of malpractice at the beginning of the relationship,” says Roth. But Michael Canning, a partner with Middletown, N.J.’s Giordano, Halleran & Ciesla who represents the lawyer, Frank Araps of North Brunswick, N.J., in the Kamaratos cases, calls the ABA opinion “consistent with the way the majority of cases and the commentators have treated the issue.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.