Arbitration and Legal Malpractice

This paper will examine the issues surrounding arbitration in the legal malpractice setting. The first part of the paper will discuss the background to the increasing use of mandatory arbitration clauses in attorney-client agreements. The second part of the paper will look at how the issue is handled in various states. The third part of the paper will discuss some important concerns about using mandatory arbitration to resolve malpractice claims and some proposed solutions to these concerns.

Background: The Advent of Mandatory Arbitration Clauses

With the explosion of litigation in American society during the last half of the twentieth century, many commentators have championed the use of arbitration to settle legal disputes. Legislators have tended to agree with this view and have enacted numerous statutes encouraging and governing the use of arbitration in lieu of litigation. The inclusion of mandatory arbitration clauses in commercial contracts is now a widespread practice, even mandating the arbitration of issues that raise questions of significant public interest. Moreover, courts have upheld these mandatory arbitration clauses.

This acceptance of arbitration, however, has not been universally present in the area of legal malpractice for several reasons. First, only recently has there been a tremendous increase in the number of malpractice claims filed against attorneys. Second, arbitration is most likely to be considere

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o evidence, discovery, and appellate review. Although many suggest that these differences are procedural, the Maryland Bar expressed the opinion that a decision to submit all disputes to arbitration over trial is sufficiently related to an attempt to limit prospective liability. Thus, the requirements outlined by Model Rule 1.8(h) should be followed. The ABA has issued further guidelines concerning mandatory arbitration clauses in retainer agreements. It has supported the view that an attorney may utilize such a clause in a retainer agreement so long as the clause does not limit the award of punitive damages, the headings of the agreement correctly reflect the substance of the document, the lawyer makes no false or misleading representations about the agreement and the lawyer fully discloses to the client all of the implications of the arbitration provision, including the loss of the client's right to sue in court and have a jury trial. In the same document, the ABA approved of the following requirements, in addition to those noted above: [A] lawyer may enter into an agreement which provides compulsory and unappealable arbitration as long as (1) the client is advised in writing that he waives the right to a jury trial; (

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