Legal Representation and Arbitration for Florida Lawyers and their Clients

As a client, you should insist on a written contract with your lawyer that clearly defines the agreement for representation. Any responsible lawyer will ensure that this is done. But read the contract carefully. Many lawyers are aware of the pitfalls of having to defend a legal malpractice case before a jury. A recent trend among some lawyers is to include an arbitration provision in their engagement contracts. A typical clause will require the client to settle their dispute with the lawyer before one or more arbitrators, in what is essentially a private proceeding. The idea is to completely bypass the court system, including the constitutionally protected right to a jury trial. Some engagement contracts limit the use of arbitration to settle disputes relating to fees. Other contracts contain very comprehensive arbitration provisions that attempt to preempt the court process for any dispute with the attorney, including a claim for legal malpractice.

This has become an issue of controversy in many states, including Florida. An American Bar Association ethics opinion supports the use of such agreement, provided that the attorney properly advises the client. ABA Formal Ethics Opinion 02-425. In Florida, the issue has never been addressed by the Florida Supreme court. However, two rules of Professional Conduct for Florida lawyers do potentially regulate such agreements. Rule 4-1.8(h) of the Florida Rules of Professional Conduct provides: “Limiting Liability for Malpractice. A lawyer shall not make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless permitted by law and the client is independently represented in making the agreement. A lawyer shall not settle a claim for such liability with an unrepresented client or former client without first advising that person in writing that independent representation is appropriate in connection therewith.” This rule raises the question of whether an agreement to arbitrate is a "limitation of the lawyer's liability." To the extent that such an agreement is interpreted to limit liability, it must comply with this rule. Another rule, Rule 4-1.5(i), directly addresses arbitration agreements between lawyers and their clients, but it is limited to agreements to arbitrate fee disputes. Like Rule 4-1.8(h), it requires that the lawyer advise the client to seek independent counsel before entering into the agreement:

“Arbitration Clauses. A lawyer shall not make an agreement with a potential client prospectively providing for mandatory arbitration of fee disputes without first advising that person in writing that the potential client should consider obtaining independent legal advice as to the advisability of entering into an agreement containing such mandatory arbitration provisions. A lawyer shall not make an agreement containing such mandatory arbitration provisions unless the agreement contains the following language in bold print: Notice: This agreement contains provisions requiring arbitration of fee disputes. Before you sign this agreement you should consider consulting with another lawyer about the advisability of making an agreement with mandatory arbitration requirements. Arbitration proceedings are ways to resolve disputes without use of the court system. By entering into agreements that require arbitration as the way to resolve fee disputes, you give up (waive) your right to go to court to resolve those disputes by a judge or jury. These are important rights that should not be given up without careful consideration.”

The recent decision of a Florida district appeal court appears to affirm the legitimacy of the use of arbitration to settle a legal malpractice dispute between a law firm and its client. See Mintze & Fraade, P.C. v. Beta Drywall Acquisition, LLC, 2911 WL 1004591 (Fla. 4th DCA, March 23, 2011). The opinion does not contain an analysis of the ethical rules in Florida that apply to such an agreement, and it is not clear whether those arguments were raised as a defense to enforcement of the arbitration provision in the engagement contract.

At this time, the enforceability of a contract that requires a client to arbitrate their legal malpractice claim against their Florida lawyer remains an open question. For an interesting review of this issue in the Florida Bar Journal, see Spector, Predispute Agreements to Arbitrate Legal Malpractice Claims: Skating on Thin Ice in Florida's Ethcal Twilight Zone?, The Florida Bar Journal, Volume 82, No. 4 (April, 2008).

Any lawyer including an arbitration provision in their agreements for legal representation in Florida should comply with Rules 4-1.8(h) and 4-1.5(i). Any client presented with such an agreement should seek independent counsel for legal advise regarding whether it is in the client's best interest to agree to such a provision.