Supreme Court may order arbitration for lawyer-client fee disputes

TSC action could reduce malpractice litigation -- State bar chief says his group 'stumbled' in selling its ideas

Email | Print By Milt Capps

TBA's Allan Ramsaur

Despite pockets of resistance in the state's legal community, the Tennessee Supreme Court may soon have a new agent to help lawyers and consumers resolve disputes over legal fees.

However, Tennessee is not moving fast enough toward this objective, according to HALT, a Washington, D.C., advocate for consumers of legal services.

In a September report, HALT declared an eight-state tie, ranking Tennessee 51st in fee-dispute resolution, and assigning Tennessee an "Incomplete" grade.

In fact, for more than two years the Tennessee Supreme Court has been considering a Tennessee Bar Association proposal that calls for Tennessee lawyers to arbitrate, rather than litigate disputes with their clients regarding fees. Arbitration would remain optional for clients.

TBA's proposal — since endorsed and amplified by a Court-appointed task force — includes creating a new Fee Dispute Resolution Commission to administer the statewide "Rule 47" program.

Proponents argue the new system would speed resolution of disputes; preserve privilege and confidentiality; minimize frivolous complaints; and, reduce professional-discipline actions and malpractice litigation.

The proposal is intended to professionalize and standardize dispute resolution statewide — in order to avert what an American Bar Association report once described as "a secretive procedural labyrinth of multiple hearings and reviews," with little or no professional administration.

During interviews last week, TBA Executive Director Allan Ramsaur told NashvillePost.com that Rule 47 reform has been slowed by the fact that TBA "stumbled" and "didn't do a good job" of persuading the state's five-largest bar associations to support the measure.

Indeed, there has been pushback: During a public-comment period, the Chattanooga Bar Association termed "inequitable" the provision making lawyer agreement to arbitration mandatory, while leaving it optional for consumers.

The Knoxville Bar Association also wrote, saying it would "unanimously oppose" the new system, citing scarce demand for dispute-resolution services outside major metro areas, among other factors.

The Supreme Court justices must also address a host of still-unresolved issues: For example, whether or not the proposed confidentiality of the new process is constitutional; the roles of non-lawyers in arbitration panels; fees to be charged, if any; whether mediation should also be an option for participants; and, whether it is a breach of civil-ligitation rules to require lawyers contemplating suing a client to notify the client of their right to resort to arbitration.

The fate of the proposed commission remains uncertain. A Supreme Court spokesperson said Friday that the justices "do, indeed, have the recommendations under consideration," but court staff have not yet provided guidance regarding when that process might culminate.

TBA's January 2005 proposal to the Supreme Court was foreshadowed in 2003, when Tennessee's lawyer-regulation system was evaluated by a committee of the American Bar Association, at the invitation of the Tennessee Supreme Court. The ABA's subsequent report suggested Tennessee consider mandatory fee-dispute resolution, as is now employed in a majority of other states.

Related: "Nashville Attorney" report on HALT critique of Tennessee lawyer-discipline efforts.