Legal Malpractice and Arbitration

Background: The Advent of 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. Especially important are clauses which make the arbitration of disputes between the contracting parties mandatory. 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, an extended analysis of alternatives to litigation was not justified until th

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the client is advised to seek independent counsel regarding this waiver and is given reasonable time to seek such counsel; and (3) the client consents to the arrangement in writing. These conditions are imposed because by requiring the client to waive his jury trial right, the lawyer is "entering into a business transaction" with the client and must avoid a possible conflict of interests. The positions of other states on this issue have varied. In 1989, a California appellate court refused to enforce an arbitration clause in a retainer agreement between an attorney and a client. The clause stated that "[i]n the event of a dispute between us regarding fees, costs or any other aspect of our attorney-client relationship, the dispute shall be resolved by binding arbitration." The court held that since the clause as a whole dealt with financial matters, it did not give fair notice to the client that it would encompass malpractice claims. In addition, the court said that the client was not sufficiently informed that, if the clause did apply to malpractice claims, it constituted a waiver to the right to a jury trial. Some commentators have suggested that the decision opened the way for properly drafted and executed arbitratio
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Approximate Word count = 3702
Approximate Pages = 15 (250 words per page)

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