St. Mary's University School of Law
Due to the variety of approaches jurisdictions employ when determining the legal ramifications of arbitration clauses in fee retainer agreements, it’s best to include an explanation of the legal consequences of arbitration in the agreements. The attorney can, and should, fully explain the potential benefits of arbitration to clients. State courts take various viewpoints on the issue, and most stand contrary to the position of the American Bar Association (ABA) and state ethics committees on the subject. Consequently, attorneys must disclose truthful and accurate information regarding arbitration agreements when engaged in multijurisdictional practice in order to ensure protection from malpractice liability. The Louisiana Supreme Court recently stretched the requirement of disclosure to place a heavy burden on attorneys in its Hodges v. Reasonover opinion. The court not only mandated the attorney’s disclosure of the arbitration clause, but also listed a minimum number of legal consequences stemming from the arbitration clause the client must be aware of before signing the retainer agreement. Part II of this Case Summary will walk through the facts of the case and analyze the majority, concurrence, and dissenting opinions. Part III will explore and balance the pros and cons of arbitration. Part IV will analyze the relevant Model Rules applicable to fee agreements. Part V will offer advice to attorneys counseling clients about the ramifications of arbitration clauses in fee retainer agreements. Generally, attorneys may curtail legal malpractice claims by including the legal benefits and consequences of arbitration in retainer agreements. Practitioners should remember to consider their clients first and foremost; proper practice ensures clients will make informed decisions on matters regarding binding arbitration clauses.
Chrissy L. Schwennsen,
Arbitration Clauses in Fee Retainer Agreements.,
St. Mary's Journal on Legal Malpractice & Ethics
Available at: https://commons.stmarytx.edu/lmej/vol3/iss1/12