In Delaney v. Dickey the New Jersey Supreme Court held that an attorney may include provisions in their retainer agreements that bind the client to arbitrate a future fee dispute or legal malpractice action, provided lawyers adequately explain the provisions to the clients. But the court said that their opinion would not be the last word – and announced it was referring the issue to its Advisory Committee on Professional Ethics.
Sometimes you get what you asked for: here the ACPE urged the Court to reconsider its decision, saying that obtaining informed consent to arbitration of malpractice before any dispute has arisen is a practical impossibility.
The link below will bring you to the ACPE’s report and proposals in the event the Court does not agree to revise their view on the issue. – GWC
[Disclosure – I am a member of the ACPE]
NOTICE TO THE BAR – Supreme Court of New Jersey
ARBITRATION PROVISIONS IN RETAINER AGREEMENTS AND
THE SCOPE OF AN ATTORNEY’S DISCLOSURE REQUIREMENTS
(DELANEY V. DICKEY) – COMMENTS REQUESTED
The Supreme Court requested the Advisory Committee on
Professional Ethics (ACPE) to study the issues arising in the case
Delaney v. Dickey, 244 N.J. 466 (2020), and to “make recommendations to [the] Court and propose further guidance on the scope of an attorney’s disclosure requirements.” 244 N.J. at 474. The Court in Delaney found that lawyers may include provisions in their retainer agreements that bind the client to arbitrate a future fee dispute or legal malpractice action, provided that the lawyer adequately explains the provisions to the client. In its attached report, a majority of the ACPE has recommended that the Court reconsider permitting lawyers to include provisions in their retainer agreements that require the client to arbitrate future fee disputes or legal malpractice actions. Should the Court determine not to
reconsider, the full ACPE included in its report both proposed further
guidance on lawyers’ disclosure requirements and suggested uniform
language intended to ensure that lawyers adequately explain any such arbitration provisions to clients.
The Court requests comments on the ACPE report and recommendations by March 23, 2022. Comments should be sent to:
Advisory Committee on Professional Ethics
Attention: Carol Johnston, Committee Secretary
Richard J. Hughes Justice Complex
P.O. Box 970
Trenton, NJ 08625-0970