Rules on Arbitration of Fee Dispute

CourtMontana Supreme Court
DecidedAugust 19, 2008
Docket08-0323
StatusPublished

This text of Rules on Arbitration of Fee Dispute (Rules on Arbitration of Fee Dispute) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rules on Arbitration of Fee Dispute, (Mo. 2008).

Opinion

August 19 2008 offices. IT IS FURTHER ORDERED that Petitioners shall have 30 days following the close of the public comment period in which to respond to any comments received. Copies of this Order will be sent to the State Bar of Montana, John C. Shulte, President and the Fee Arbitration Committee, Jim Lewis, Chair. DATED this \qkday of August, 2008.

1" Justices July 10 2008 describes the history of the Rules on Arbitration of Fee Disputes. The fourth

section is a summary of the major changes sought by this Petition.

n. PROCEDURAL HISTORY LEADING TO REQUEST FOR RULE CHANGES

The current Rules on Arbitration of Fee Disputes were last amended

by this Court in July 1998. Since that time the Fee Arbitration Committee of

the State Bar of Montana has met to monitor the effectiveness of the Fee

Arbitration process, propose new rules and revise existing rules. The

proposed changes were recommended by the Fee Arbitration Committee in

response to issues arising from the decade's arbitration proceedings, as well

as changes needed for consistency in language and grammar.

The attached revisions were presented by the Fee Arbitration

Committee to the State Bar Board of Trustees at their regular meeting on

April 4,2008. The State Bar Board of Trustees approved the revisions. The

next step in the process is this petition to the Court for amendment approval.

111. COURT'S AUTEIORITY TO AlMEND RULES

The Court has the exclusive authority to establish rules governing the

arbitration of fee disputes. Article VII, Section 2(3) of the 1972 Montana

Constitution gave the Supreme Court the authority to make rules governing

the conduct of the members of the State Bar.

PETITION AND MEMORANDUM IN SUPPORT OF THE REVISION OF THE 2 RULES ON FEE ARBITRATION The Supreme Court and the State Bar of Montana have enjoyed a

history of cooperation and innovation in the development and

implementation of rules and programs that carry out the purposes of the

organization. Those purposes are described in the Court's Order unifying

the Bar:

The purposes of the Unified Bar of Montana shall be to aid the courts in maintaining and improving the administration of justice; to foster and maintain on the part of those engaged in the practice of law high standards of integrity, learning, competence, public service, and conduct; to safeguard proper professional interests of members of the bar; to encourage the formation, maintenance and activities of local bar associations; to provide a forum for the discussion of and effective action concerning subjects pertaining to the practice of law, the science and jurisprudence and law reform and relations of the bar to the public; and to ensure that the responsibilities of the legal profession to the public are more effectively discharged.

In In re Petition of the State Bar of Montana for a Dues Increase, 7 20,

53 P.3d at 857 the Court stated "the State Bar of Montana must continue to

address the Court's and the legal profession's responsibilities to the public

through such programs as Lawyers Helping Lawyers, Lawyers Fund for

Client Protection; and arbitration of fee disputes."

IV. HISTORY OF THE RULES ON ARBITRATION OF FEE DISPUTES

The Fee Arbitration Committee is a Standing Committee of the State

Bar of Montana. The committee is comprised of attorney, judicial and lay

members from across the state. The objectives of the committee are to: PETITION AND MEMORANDUM IN SUPPORT OF THE REVISION OF THE 3 RULES ON FEE ARBITRATION 1. Review rules and recommend changes. 2. Encourage Bar support through participation in the program and as panel members. 3. Monitor program for continued improvement.

After the July 1998 amendments were adopted, the committee met to

receive feedback on arbitrations conducted regarding fee disputes between

clients and attorneys, and to propose changes to the rules as a result of that

feedback. The committee met on the following dates: April 2,2001;

October 19,200 1; January 28,2002; November 2 1,2003; March 12,2004;

October 2,2007 and January 2008. Proposed changes were submitted to the

State Bar Board of Trustees on April 4,2008 and were approved.

V. SUMMARY OF REQUESTED RULE CHANGES

Set forth below is a summary of the major changes sought by this

Petition.

Rule I - Purpose.

The committee unanimously agreed that this program should not be

used to settle attorneylattorney fee disputes, but that arbitration is meant to

settle disputes between clients and attorneys. Language was added to Rule

1.1 to clarifL this distinction.

The committee recommended adding language to Rule 1.3(c) to

preclude petitions being filed for fee disputes on matters that are currently in

process with courts or administrative panels. There have been instances PETITION AND MEMORANDUM IN SUPPORT OF THE REVISION OF THE 4 RULES ON FEE ARBITRATION when a petition for fee arbitration was filed while the matter was in

litigation, and where the fee issue was within a court's jurisdiction. The

addition of Rule 1.3(c) prevents these petitions from being filed, deferring to

the court's jurisdiction.

The committee proposed new Rule 1.5 which prevents an attorney

from filing a lawsuit over fees after a client has initiated resolution through

the fee arbitration process. There have been instances when an attorney filed

a formal lawsuit after the client sought resolution through arbitration. The

addition of Rule 1.5 ensures that clients may seek resolution of fee disputes

by the less formal arbitration process before being subject to a full court

proceeding.

Rule II - Administrative Matters - Setting Up Panels. I Changes to Rule 3.1 are proposed which allow either party to

participate in a fee arbitration hearing by telephone conference call (at their

own expense) if the physical location of the hearing is one hundred (100) or

more miles away. Current rules provide for telephone conference calls only

if both parties agree to the telephone conference. Additional changes to

Rule 3.1 deal with appointments of fee arbitration panelists by the State Bar,

keeping in mind the goal of seating panelists of attorneys and lay persons

from throughout the state of Montana.

PETITION AND MEMORANDUM I SUPPORT OF THE REVISION OF THE N 5 RULES ON FEE ARBITRATION Rule V - Initiation of Proceedings.

The committee recommended the addition of Rule 5.7 which outlines

procedures for obtaining a binding arbitration decision. Both parties must

agree to binding arbitration for it to take place. If binding arbitration is not

selected, each party will have thirty (30) days from the date the decision is

mailed to file suit before the decision will bind each party. The committee

notes that there are many questions from participants on this point, and new

Rule 5.7 should clarifj the procedures on how to obtain binding arbitration.

Rule VI - Selection of Arbitrators.

Rules 6.2 and 6.3 have been revised to clari@ how each party may

strike an arbitrator fi-om the list provided by the State Bar. Currently under

Rule 6.2, the State Bar mails each party a numbered list of names, addresses

and occupations of seven (7) members of the panel who are eligible to

arbitrate the dispute. The members on the panel are assigned consecutive

numbers, alternating between attorney and lay members. The list also

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Related

§ 6.1
Oregon § 6.1

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