Mandatory arbitration clauses have found a home in some law firms’ standard engagement letters, but one malpractice case in Philadelphia federal court is challenging whether such clauses violate public policy, or at least should be more detailed in explaining to a client what he or she is giving up by agreeing to arbitration.
The use of mandatory arbitration clauses, while common in partnership agreements or between two corporate entities, does not seem pervasive in Pennsylvania firm engagement letters, where some firms have said they don’t want to arbitrate with clients who they view as benefiting from the arbitration. But that isn’t to say those firms perceive an ethical or legal ban on such provisions.
