Fee disputes between an attorney and client or between attorneys who have both worked on the same case may often be resolved through mediation or arbitration. Using arbitration to avoid litigation is a speedy and inexpensive means of resolution, shortening the process for both parties. The Bar Association's Fee Arbitration Committee provides both mediation and arbitration as a means to resolve fee disputes. This service is available to the public and to attorneys provided that there is a Baltimore City nexus.

When a dispute arises that cannot be resolved directly between the parties, binding arbitration may offer the next best solution. The agreement of both parties is necessary, since unlike litigation, one party cannot compel the other to arbitrate the dispute. The mediation/arbitration process begins when one party to the dispute (the "Petitioner") contacts the Secretary of BABC's Fee Arbitration Committee. The Committee Secretary will preliminarily review the dispute and confirm or decline the Committee's jurisdiction. The Committee will decline jurisdiction if the fee dispute is pending in court, if there is no connection to Baltimore City, or if a court or administrative agency has jurisdiction to decide the fee for legal services. In addition, when a fee dispute involves conduct that violates the Maryland Rules of Professional Conduct, jurisdiction may be declined or deferred to the Attorney Grievance Commission of Maryland.

A "Petition for Arbitration of a Fee Dispute" is forwarded to the Petitioner, and when the completed Petition to Arbitrate is returned to the Fee Arbitration Committee jurisdiction is confirmed. A copy of the Petition is forwarded to the other party to the dispute (the "Respondent") with a "Respondent's Agreement to Arbitrate." Additionally, a copy of the Petition is forwarded to a member of BABC's Fee Arbitration Committee to provide mediation between the parties. Mediation is very often successful in resolving attorney fee disputes.

However, if mediation is not successful, the Respondent is given ample time to answer the Petition, and by doing so consents to the jurisdiction of the Fee Arbitration Committee for binding arbitration. When the executed Respondent's Agreement is filed, the parties become bound by the Maryland Uniform Arbitration Act. Withdrawal is permitted only when both parties agree to discontinue the proceedings.

The parties receive notice of the time and location of the hearing as well as the names of the members of the arbitration panel (the "Panel). Each party has an opportunity to object for cause to any particular panel member. For disputed amounts less than $2,500 only a single arbitrator may be used. For larger amounts, a three-member panel is appointed, and a chief arbitrator is designated to preside over the hearing.

At the hearing, each party has an opportunity to present witnesses, and all testimony is given under oath. Cross-examination is permitted, and members of the Panel may also ask questions. The chief arbitrator rules upon the relevance and materiality of the evidence as well as on questions of procedure. Where the disputed amount exceeds $2,500, the chief arbitrator may authorize the use of discovery procedures. Relevant evidence includes the original fee agreement, the attorney's invoices, the attorney's explanation of the time spent on the case, the results achieved and all communication (written or verbal) between the attorney and client relating to the case. The attorney-client privilege related to the subject matter of the dispute is waived only for the purpose of the hearing. At the hearing's conclusion, which usually takes one to two hours (but could last a few days), the Panel will consider all of the evidence to determine what a reasonable fee, if any, should be. Both the attorney's fee charged and the client's estimation of what is a fair and reasonable are considered, but neither is binding upon the arbitrators. A decision is usually mailed to both parties within ten days. In binding arbitration, the parties accept the judgment of the arbitrators and waive the right to take the dispute to court or to appeal the decision. If the Panel's decision is not complied with however, the prevailing party may seek court enforcement. The advantages to the fee arbitration process are clear: The process is private and relatively informal. There is no jury, and the parties are told in advance who will participate in the hearing. Finally, resolution of the dispute may be reached in a shortened time frame, and due to the simplified process, costs are minimized. When the misfortune of a fee dispute arises, arbitration may be the best option.

Rules of the Fee Arbitration Committee of The Bar Association of Baltimore City:

(Approved May 12, 1992)
(Revised November 24, 1992; December 6, 1994; December 2, 1997; May 18, 1998)

Purpose:

1.1 The purpose of the Fee Arbitration Committee is to provide, without fee to either party, for the expeditious resolution of disputes involving fees charged or shared:

    (a) within the attorney-client relationship;

    (b) by attorneys acting in their professional capacity where the fee dispute arises out of a
    professional relationship other than that of attorney-client; and

    (c) by attorneys sharing fees with other attorneys.

Committee:

2.1 The Fee Arbitration Committee ("Committee") is hereby constituted as a Standing Committee of the Bar Association of Baltimore City ("Association"). The Committee will consist of a minimum of five members. One member shall be designated as Chairperson appointed by the President of the Association in accordance with the procedures of the Association for appointing members of Standing Committees and the designation of Chairpersons thereof.

2.2 All Committee members shall be members in good standing with the Association.

2.3 The Committee shall be charged with the responsibility of overseeing the work of the arbitration panels; formulating rules of procedure and developing policy to improve the quality of operation of this fee dispute mechanism; and to promote this service of the Association.

Secretary:

3.1 The Secretary shall be a member of the executive staff of the Association.

3.2 The Secretary shall keep records of all proceedings of the Committee and Hearing Panels; shall be responsible for receiving all correspondence, pleadings, exhibits, etc. from and filing same by all parties to a dispute; shall schedule proceedings and send appropriate notice of the same to all parties; shall retain all documents relating to any proceeding for a period of three (3) years, except as otherwise set forth in these Rules; shall institute a docket system for all arbitration proceedings; shall compile copies of all Awards, which shall be maintained in the Committee's permanent file; and perform those duties specifically set forth in these Rules or at the direction of the Committee.

Jurisdiction:

4.1 The Committee shall have jurisdiction in disputes, as described in Rule 1.1 hereof, involving an attorney who (a) maintains an office for the practice of law in the City of Baltimore regardless of whether s/he is a member of the Association; (b) is a member of the Association; or (c) represented a client residing in Baltimore City involving a case arising or litigated in a Baltimore City proceeding. The Committee's jurisdiction shall also include matters wherein all parties consent to fee arbitration pursuant to Rules 7.1 - 7.4 herein.

4.2 The Committee shall have jurisdiction in fee disputes between a client and an attorney who is a member of the Lawyer Referral and Information Service of the Association, when the attorney--client relationship is the result of a referral to the attorney.

4.3 The Committee may, in its discretion, decline or defer the exercise of its jurisdiction concerning any fee dispute which is pending in court or which involves conduct that may constitute a violation of the Maryland Rules of Professional Conduct.

4.4 Fee disputes over which, in the first instance, a court or administrative agency has jurisdiction to establish or regulate the fee for legal services, shall be excluded from the jurisdiction of the Committee.

Authority:

5.1 Any party filing a Petition or Response with the Committee of the Association shall agree to its jurisdiction and to abide by these Rules.

5.2 Upon the filing of both Petitioner's and Respondent's Agreements to Arbitrate, both parties shall be bound by the Maryland Uniform Arbitration Act, Annotated Code of Maryland, CJ 3-201 et seq.

5.3 As used herein, a period of time designated as seven days or less shall mean business days; any longer period of time shall mean calendar days.