The Bar Association of Baltimore City (Maryland)

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.

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)

Initiation of Proceedings:

6.1 Upon initial contact by a prospective Petitioner, the Secretary shall make informal inquiry to determine probable jurisdiction. If the Secretary determines probable jurisdiction, s/he shall forward to the prospective Petitioner a blank form of "Petition For Arbitration of a Fee Dispute" along with a set of these Rules.

6.2 Proceedings before the Committee shall be instituted by the filing of the "Petition For Arbitration of a Fee Dispute."

6.3 Upon filing of the Petitioner's Agreement with the Committee, the Secretary shall review the Petition to make a preliminary determination as to whether the Committee may have jurisdiction. The Secretary shall have full power to require additional information or materials from the Petitioner when s/he deems it to be desirable or necessary.

6.4 In the event the Secretary determines jurisdiction does not exist, the Secretary shall consult with the Committee Chairperson for final ruling on jurisdiction. Should the Committee Chairperson concur, the Secretary shall notify the Petitioner in writing of the reasons for the lack of jurisdiction. The matter shall then be closed.

6.5 When jurisdiction to arbitrate a fee dispute is determined to exist, one copy of the Petition shall be forwarded to the Respondent, together with a Respondent's Agreement to Arbitrate, and a copy of these Rules. The Respondent shall be given a reasonable opportunity to respond to the dispute and consent to the jurisdiction of the Committee.

6.6 If the Respondent either fails to respond to the Committee, or declines to submit the matter to binding arbitration, the Secretary shall so notify the Petitioner. The matter shall then be closed.

Consent to Arbitration and Settlement:

7.1 Upon receipt of the executed Respondent's Agreement (together with materials relevant to the fee dispute), a contract for binding arbitration shall exist without further action of the Committee or the parties.

7.2 When a contract for binding arbitration arises pursuant to Rule 7.1 hereof, each party is deemed to have waived, for purposes of these proceedings only, any attorney-client privilege which may exist with respect to the subject matter of this dispute.

7.3 At any stage during the proceedings, a member of the Committee, who shall not serve on the Hearing Panel, may, at the request of the Secretary or any party, endeavor to resolve the dispute informally, and for such purposes may communicate directly with the parties to mediate the dispute.

7.4 If the dispute is resolved informally, the matter shall be withdrawn by the parties. In the absence of a written settlement agreement, all parties to the arbitration shall file a signed withdrawal, at which time the matter will be closed, with prejudice, by the Committee.

Referral to Arbitration:

8.1 The Secretary, in consultation with the Chairperson of the Committee, shall appoint the Chief Arbitrator and two Arbitrators to the Hearing Panel for a fee dispute once both parties have agreed to binding arbitration. In his/her discretion, the Secretary may designate a lay person, as defined in Rule 8.4 hereof, as one of the Arbitrators.

8.2 The Chief Arbitrator shall be a current or past member of the Committee, or a member in good standing of the Association who has previously participated as an Arbitrator.

8.3 The attorney panel members shall be members in good standing with the Association, each of whom has been licensed to practice law for at least two years.

8.4 The lay member of the panel, if any, shall be selected from a list of non-members of the Association who shall act as Hearing Panel members. It shall be the responsibility of the Committee to recruit and of the Secretary to maintain this list.

8.5 Notwithstanding the provisions of Rules 8.1 to 8.4 hereof, the Chairperson, at his or her discretion, may designate a single Arbitrator to preside over and rule on matters involving an amount in dispute of less than $2,500. This arbitrator shall meet the requirements set forth in Rules 8.2 and 8.3 hereof.

8.6 All persons serving as Arbitrators shall take a written oath to be filed with the Secretary to decide the controversies submitted to them according to the law and evidence and the equity of the case to the best of their judgment without favor, influence, or prejudice.

8.7 It shall be the obligation of any panel member or sole Arbitrator to promptly disclose to the Chairperson and the Secretary any reason why s/he cannot ethically or conscientiously serve. In the event a member declines or is unable to serve, the Chairperson shall select a replacement Arbitrator.

8.8 If at the time set for a Hearing before a three member panel, all three members are not present, the Chief Arbitrator of the Hearing Panel, if present; or in the event of his/her unavailability, the Chairperson of the Committee, in his/her sole discretion, shall decide either to postpone the Hearing, or, if the parties consent, to proceed with the Hearing with one member of the panel as the Sole Arbitrator, in which case s/he shall also designate the member of the panel who will hear the case as Sole Arbitrator; or replace the missing Arbitrator with the approval of all parties to the arbitration. In no event will a hearing be conducted by, or proceed with, two Arbitrators, except as otherwise set forth in Rule 8.9 hereof.

8.9 If any member of a three member panel dies or becomes unable to continue to act after the hearing, but before an Award has been made, the remaining Arbitrators shall proceed to issue the Award in accordance with the decision reached by the Hearing Panel. If a panel member dies or becomes unable to serve prior to the Hearing, the proceedings to that point shall be reviewed by the Committee Chairperson unless the parties, with the consent of the Chief Arbitrator, elect to proceed forward with the Hearing with one of the remaining Arbitrators serving as the Sole Arbitrator. When proceedings are to be reviewed by a newly appointed substitute panel member, such review shall consist of an examination of the evidence submitted and oral summary by the Chief Arbitrator.

8.10 The Secretary, by written notice served on all parties personally or by first class mail, shall inform the parties of the names of the members of the Hearing Panel, together with the time and location of the Hearing. Such notice shall be given at least 21 days prior to the scheduled Hearing, unless waived by all parties. The appearance of a party at a scheduled arbitration Hearing shall constitute a waiver of his/her notice rights hereunder.

8.11 The notice shall set forth the names and business addresses of the Arbitrators, and indicate that the parties should be prepared to present witnesses and evidence in support of their positions, and if they so wish, to have legal counsel or a certified shorthand reporter present, at the requesting party's own expense.

8.12 Within seven days of the date of the notice, any party to the arbitration may challenge one or more panel members for cause by filing an objection in writing or by telephone with the Secretary. The Chairperson shall be notified and shall appoint a replacement acceptable to the parties. The appearance of a party at a scheduled arbitration Hearing shall constitute a waiver of his/her challenge rights hereunder.

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)

Arbitration Hearing:

9.1 Each party to a dispute has the right to be represented at the Hearing or any stage of the proceedings by counsel or other representative at his/her own expense. For cause shown or on its own motion, the Committee may, in its discretion, assign a Committee member as an attorney to represent a "client" Petitioner or "client" Respondent in any proceedings before a Hearing Panel.

9.2 A party that has consented to binding arbitration may waive their appearance at the oral hearing by notifying the Secretary in writing. If all parties agree, they may waive oral hearings and may submit their contentions in writing, together with exhibits, to the Hearing Panel and the opposing party. The Hearing Panel shall notify the parties of a schedule for written submissions, allowing each party not less than 10 days nor more than 30 days from the date of notice for compliance.

9.3 If any party to an arbitration who has been notified fails to appear at the Hearing, the Chief Arbitrator, after inquiry into the reason for the party's failure to appear, may, in his/her discretion, either dismiss the Petition without prejudice, postpone the Hearing, or proceed with the Hearing and determine the controversy upon the evidence produced and enter an Award, notwithstanding any such failure to appear.

9.4 The testimony of all witnesses shall be given under oath, administered by the Chief Arbitrator.

9.5 Photocopies of documents shall be submitted rather than originals, unless: (1) a genuine question is raised as to the authenticity of the original; or (2) in the circumstances it would be unfair to submit the photocopy in lieu of the original.

9.6 The Chief Arbitrator shall preside at the Hearing. S/he shall be the judge of the relevance and materiality of the evidence offered and shall make all rulings on questions of procedure. S/he shall exercise all powers relating to the conduct of the Hearing. Conformity to the technical rules of evidence shall not be required.

9.7 On the hearing date, the Hearing Panel shall meet, take testimony, receive evidence, and hold a complete and full hearing on the matter.

9.8 All parties to the arbitration shall have an absolute right to attend all Hearings, to present evidence, and to cross examine witnesses appearing at any Hearing. The exclusion of other persons or witnesses waiting to be heard shall rest in the discretion of the Hearing Panel.

9.9 The Arbitrators, through the Chief Arbitrator, may request opening statements and may prescribe the order of proof. In any event, all parties shall be afforded full and equal opportunity for the presentation of any material evidence.

9.10 The Chief Arbitrator may adjourn the Hearing from time to time as necessary. Upon request of a party to the arbitration for good cause, or upon his/her own determination, the Chief Arbitrator may postpone the Hearing from time to time.

9.11 Adjourned dates for the continuation of any Hearings, or new hearing dates for Hearings postponed at the direction of the Chief Arbitrator, shall be fixed for such times and places as the Arbitrators may select with due regard to the circumstances of all the parties and the desirability of a speedy determination.

9.12 The provisions of the Maryland Uniform Arbitration Act, Annotated Code of Maryland, CJ 3-217(a) and (c), pertaining to the issuance and enforcement of subpoenas in arbitration proceedings shall be applicable to the arbitration proceedings held pursuant to these Rules.

9.13 On application of a party and for use as evidence, the Arbitrators may permit a deposition to be taken in the manner and upon the terms designated by the Arbitrators if a witness is unable to attend a Hearing.

9.14 In those cases in which the client is represented by counsel and the amount in dispute exceeds $2,500, the Chief Arbitrator, in his/her sole discretion, may authorize the use of discovery procedures, including, but not limited to, depositions and interrogatories, under such terms as s/he shall deem appropriate. In the event the Chief Arbitrator authorizes the use of discovery procedures and such authorization does not limit their use, the Maryland Rules of Civil Procedure shall be applicable. The parties shall be encouraged to freely exchange or permit inspections of documents and conduct informal discovery. The extent to which the parties cooperate or fail to cooperate in informal discovery may be considered by the Chief Arbitrator in deciding on the extent to allow formal discovery.

9.15 Before closing any Hearing, the Chief Arbitrator shall specifically inquire of all parties whether they have further evidence to submit, in whatever form. If the answer is negative, the hearing shall be declared closed. The Chief Arbitrator shall set a date for submissions of memoranda or briefs, if requested by the Hearing Panel.

9.16 The Hearing may be reopened by the Hearing Panel on its own motion or on application of a party at any time before the Award is signed and filed with the Secretary.

9.17 In the event of the death or incompetency of a party to the arbitration proceeding prior to the close of the Hearing, the proceeding shall be abated without prejudice to either party to proceed in a court of proper jurisdiction to seek such relief as may be warranted. In the event of the death or incompetency of a party after the close of the Hearing but prior to an Award, the decision rendered shall be binding upon the heirs, personal representatives, and beneficiaries of the deceased party, and on the estate and guardian of the incompetent party.

9.18 Any party may have a hearing reported by a certified shorthand reporter or mechanical recording thereof at his/her expense by written request presented to the Chief Arbitrator at least three days prior to the date of the Hearing. In the event of such request, any other party to the arbitration shall be permitted to receive at, his/her own expense, a copy of the reporter's transcript of the testimony or mechanical recording by arrangements made directly with the reporter. A copy of any prepared transcript shall be made available to the Hearing Panel at the expense of the requesting party. When no party to the arbitration requests that the Hearing be recorded, and the Hearing Panel or Sole Arbitrator deems it desirable to have a Hearing recorded, the Chief Arbitrator or Sole Arbitrator may use such recording device as s/he selects. Transcripts may be prepared from recordings under the direction of the Arbitrators, upon advance payment of costs for such transcripts. Failure of the recording device to produce a legible recording or accidental destruction of such recording shall not be grounds to set aside an arbitration Award.

Award of Arbitration:

10.1 The Hearing Panel shall render its Award within a reasonable period of time, ordinarily within 14 days, after the close of the Hearing or final Hearing (if more than one has been held) or within a reasonable period of time, ordinarily 14 days, following the meeting of the Hearing Panel to which the dispute is submitted under Rule 9.2 hereof.

10.2 The arbitration Award shall be made by a majority of the Hearing Panel, or by the sole arbitrator. The Award shall be in writing and signed by the members of the panel concurring therein. The Award shall include a determination of all questions submitted to the panel, the decision of which shall be necessary to resolve the controversy.

10.3 There shall be no established form for the Award, but it should set forth a brief statement of the dispute, the questions dealt with, the findings of the Panel and the Award, together with directions for the disbursement or disposition of monies to the parties.

10.4 The Arbitrators may include in the Award a direction for payment of expenses related to the proceedings excluding, however, fees to Arbitrators, client representatives, or counsel.

10.5 If a majority of the Hearing Panel cannot agree on a decision, the matter shall be resubmitted, de novo, to a new Panel.

10.6 The Chief Arbitrator shall forward the signed Award, together with any new documentary evidence presented at the Hearing, copies of transcripts not previously made part of the file, and/or a copy of any transcript of the Hearing, as applicable, to the Secretary, who shall thereupon, for and on behalf of said Panel, serve a copy of the signed Award on each party and each panel member, personally or by first class mail. Each Arbitrator shall then forward copies of all documents relating to the Hearing to the Secretary for storage.

10.7 In any subsequent court proceedings where the subject matter of the fee dispute or the integrity of the arbitration proceeding is an issue, the Committee may appoint counsel and provide expert testimony as it deems necessary and proper.

10.8 If the Award shall determine that the participating attorney or attorneys who consented to binding arbitration are not entitled to any portion of the disputed fee, service of a copy of such Award on said attorney or attorneys shall:

(a) terminate all claim and interest of the participating attorney or attorneys against the
participating client or clients or other participating attorneys in respect to the subject matter
of the arbitration;

(b) terminate all right of such attorney or attorneys to retain possession of any documents,
records or other properties of such client or clients pertaining to the subject matter of the
arbitration which has been held under claim of attorney's lien; and

(c) terminate all right of such attorney or attorneys to oppose the substitution of one or
more other attorneys designated by such client or clients in any pending litigation
pertaining to the subject matter of the arbitration.

10.9 If the Award shall be in favor of an attorney or attorneys who consented to binding arbitration, it shall fix the amount to which s/he or they are found to be entitled. Payment of that amount shall:

(a) constitute a complete satisfaction of all claims and interest of the participating attorney
or attorneys against the participating client or clients or other participating attorneys in
respect to the subject matter of the arbitration;

(b) terminate all right of such attorney or attorneys to retain possession of any documents,
records, or other properties of such client or clients pertaining to the subject matter of the
arbitration then held under claim of attorney's lien; and

(c) terminate all right of such attorney or attorneys to oppose the substitution of one or
more other attorneys designated by such client or clients in place of the participating
attorney or attorneys in any pending litigation pertaining to the subject matter of the
arbitration.

10.10 If the subject matter of an Award in favor of an attorney or attorneys who have consented to binding arbitration involves pending litigation and a client or clients, for good reason, shall be unable to pay promptly and in full the amount of any Award rendered against him/her or them, application may be made to any court having jurisdiction for a determination of a method deemed adequate to secure payment. If such determination shall be made and the terms thereof be promptly fulfilled by the client or clients, such compliance shall entitle the client to the relief specified by the provisions of Rule 10.9 (a), (b), (c) hereof.

Communication Between the Parties:

11.1 With the exception of rulings on discovery matters by the Chief Arbitrator, there shall be no communication between the parties and the members of the Hearing Panel regarding the subject matter of the arbitration other than at the arbitration proceedings. Any other oral or written communications from the parties to the members of the Panel or from the members of the Panel to the parties shall be directed to the Secretary for transmittal.

Confidentiality:

12.1 Unless ordered by a court of competent jurisdiction, with the exception of the Award itself, all records, documents, files, proceedings, and hearings pertaining to the arbitration of any fee dispute under these Rules shall not be open to the public or to any person not involved in the dispute.