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COMMITTEE ON MANDATORY FEE ARBITRATION ARBITRATOR TRAINING 1
COMMITTEE ON MANDATORY FEE ARBITRATION
ARBITRATOR TRAINING
OUTLINE
I.
Introductions
II.
Program Overview and Relationship between State Bar and Local Bar Programs
A.
Under Bus. & Prof. Code §6200, effective 1979, the State Bar is required to
arbitrate fee disputes.
1.
Attorney must give client notice of right to arbitration on State Bar
approved form, available from local programs or State Bar website(www.
calbar.ca.gov), before suing client for fees.
2.
Client
*
s right to arbitrate is waived if client (a) fails to request arbitration
within thirty days of receipt of notice, Bus. & Prof. Code § 6201(a), (b)
commences an action or files any pleading seeking judicial resolution of
fee dispute or affirmative relief for malpractice, Bus. & Prof. Code §
6201(d), or (c) answers a complaint in the attorneys civil action for fees,
Bus. & Prof. Code § 6201(b).
3.
Attorney and client may stipulate to arbitration after the client
*
s waiver,
Bus. & Prof. Code § 6201(e)..
4.
Once arbitration is requested by the client, any filed action or other
proceeding (including small claims court actions and other types of
arbitration) commenced by the attorney are automatically stayed, with
limited exceptions, e.g. writs of attachment and other provisional
remedies, see Code of Civ. Proc. § 1281.8.
B.
The State Bar delegates the responsibility for fee arbitrations to local bar
association programs to the maximum possible extent. The State Bar Committee
on Mandatory Fee Arbitration, established in 1984, oversees attorney fee
arbitration programs. Local bar arbitration programs must ensure that their rules
of procedure comply with the Guidelines and Minimum Standards for the
Operation of Mandatory Fee Arbitration Programs
C.
The local bar rules of procedure, which vary, are approved by State Bar Board of
Governors, entitling the local bar program to rely on the statutory immunity
provision set forth in Bus. & Prof. Code § 6200(f).
1. Arbitrator, mediator, program, directors and program staff have
same immunity which attaches in judicial proceedings. 2
2. Includes immunity from liability for damages, from testifying in
most proceedings, from being sanctioned by the court.
D.
Local bar arbitration programs have primary jurisdiction. State Bar arbitration
program used only if:
1.
No local bar program exists;
2.
Matter not within jurisdiction of local bar program; or
3.
Either party claims that he or she will not obtain a fair hearing under local
bar program. Note: party may request removal to the State Bar from the
local bar program based on a claim of unfairness at any time. Arbitration
proceedings are stayed until there is a ruling on the removal request by the
State Bar.
F.
In 2001, there were approximately 2,500 arbitrations statewide, 142 of which were
handled by the State Bar program.
G.
State Bar, under Bus. & Prof. Code § 6203(d), has exclusive authority to assist
clients with enforcement of a final award rendered by any approved fee arbitration
program if client awarded a refund and attorney refuses to comply.
1.
State Bar has authority to assess administrative penalties and place an
attorney on inactive status for non-compliance.
2.
To avoid inactive status, attorney must show either:
a.
Compliance with the award;
b.
That he is not responsible for payment of the
award; or
c.
Financial inability to pay the award.
3.
Approximately 65 requests for enforcement of arbitration awards were
pending in 2002. In 2001, the State Bar filed 15 motions to enroll
attorneys involuntarily inactive for noncompliance.
H.
Mediation.
1.
Since 1995, local bar programs and the State Bar may offer fee mediation
services under approved minimum standards through the MFA program.
2.
Many of the larger local bar programs have active mediation programs. 3
III.
Considerations Before the Hearing and for Commencing the Hearing
A.
Skit No. 1.
B.
Arbitrator Selection.
1. Notice of appointment generally served by program, with no arbitrator
background. Parties may request arbitrator to provide his/her resume.
2. Client may request that attorney arbitrator on panel practice in area of either
criminal or civil law depending on nature of clients underlying case. Bus. & Prof.
Code §6200(e).
C.
Appearance of bias.
1.
Avoiding the appearance of bias is as important as recusal for
actual bias.
a.
Both parties may believe the program to be biased against them.
b.
If clear appearance of bias exists, do not accept case.
c.
If case is accepted and then something is discovered suggesting
grounds for recusal or appearance of bias, send it back.
d.
If unsure whether there is a problem, call local program staff.
2.
If appearance of bias could be an issue, even if arbitrator believes that he
or she will still be fair, the better rule is to disclose (see Arbitration
Advisories No. 97-01 dated July 18, 1997, No. 94-01 dated January 7,
1994, and No. 94-03 dated July 15, 1994).
a.
Disclosure should be early on in case and in writing to all parties
with copy to program.
b.
Give parties an opportunity to disqualify.
c.
If disclosure made at hearing, consider continuing the hearing to
give parties a chance to think about it, particularly if there is a pro
per client.
3.
One ground for vacation of an award is if the arbitrator was subject to
disqualification upon grounds specified in Code of Civ. Proc. section
1281.91, but failed upon receipt of timely demand to disqualify himself...
Code of Civ. Proc. §1286.2(a). 4
a.
Code of Civil Procedure §1281.91(d) requires arbitrators to
disqualify themselves on any ground specified in Section 170.1 for
disqualification of a judge.
b.
Code of Civil Procedure §170.1 requires disqualification if:
i)
The [arbitrator] has personal knowledge of disputed
evidentiary facts concerning the proceeding;
ii)
The [arbitrator] served as a lawyer in the proceeding, or
in any other proceeding involving the same issues he or she
served as a lawyer for any party in the present proceeding
or gave advice to any party in the present proceeding upon
any matter involved in the action or proceeding;
iii)
The [arbitrator] has a financial interest in the subject
matter in a proceeding or in a party to the proceeding;
iv)
The [arbitrator], or the spouse of the [arbitrator], or a
person within the third degree of relationship to either of
them, or the spouse of such a person is a party to the
proceeding or an officer, director, or trustee of a party;
v)
A lawyer or a spouse of a lawyer in the proceeding is the
spouse, former spouse, child, sibling, or parent of the
[arbitrator] or the [arbitrator
*
s] spouse or if such a person
is associated in the private practice of law with a lawyer in
the proceeding;
vi)
For any reason (A) the [arbitrator] believes his or her
recusal would further the interests of justice, (B) the
[arbitrator] believes there is a substantial doubt as to his or
her capacity to be impartial, or (C) a person aware of the
facts might reasonably entertain a doubt that the
[arbitrator]
would be able to be impartial. Bias or prejudice towards a
lawyer in the proceeding may be grounds for

disqualification;
vii)
By reason of permanent or temporary physical impair-
ment, the [arbitrator] is unable to properly perceive the
evidence or is unable to properly conduct the proceeding.
4.
Recent legislation, effective July 1, 2002, requiring written disclosures by
private contractual arbitrators [Code of Civ. Proc. §1281.85] does not
apply to MFA attorney-client fee arbitrations, under the interpretive rules
established by the Judicial Council. 5
D.
Preparation for the Hearing.
1.
Identifying the parties. The parties are the petitioner (usually the Client)
and the respondent (usually the Attorney.) The parties are identified as
such in the package you receive from the program administrator. If there
are questions as to who are proper parties, discuss them with the
administrator. For example, an insurance company paying the fees of
Cumis counsel for the insured is not a proper party in a MFA fee
arbitration challenging Cumis counsel
*
s fees. Under National Union Fire
Insurance Company of Pittsburgh v. Stites, (1991) 235 Cal. App.3d 1718,
arbitration pursuant to section 6200 et seq. is limited to fee disputes
between attorneys and their clients. Contrast this with Wager v.
Mirzayance, (1998) 67 Cal. App. 4th

1187 which held that a father who
retained an attorney to defend his son was entitled to notice of client
*
s
right to arbitrate and to participate in arbitration, even though the father
was an account debtor rather than a client.
2.
Setting the hearing date and notice of hearing. Many programs have local
rules with guidelines for the time periods within which hearings should
be set and conducted. Within such rules, try to contact the parties for
mutually convenient hearing dates and times. Arbitrators often set
hearings in t