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Many States provide an easy way for the public to dispute the cost of legal services they have been charged. In New Jersey, the Supreme Court had created seventeen district fee arbitration committees who hear cases where the amount of fees charged is less than $100,000. As described in New Jersey Court Rule 1:20A in cases involving less than $3000 in fees, one arbitrator will make a decision and over this amount three people will be involved of which two or three will be lawyers. Further information can be found on the New Jersey Judiciary web-site or by calling the Ethics/Fee Arbitration hotline at 1-800-406-8594.
At the arbitration hearing, documents can be presented, sworn testimony taken and you can even ask them to subpoena witnesses to attend, if appropriate. The decision of the arbitrators is binding on both parties, but this doesn’t prevent a legal claim for malpractice or the filing of an ethics complaint. So what are the advantages of fee arbitration:
- Low cost to the claimant - $50 filing fee
- If the lawyer does not respond or appear at the hearing, the case will be considered as uncontested
- Burden of proof is on the attorney to show that the amount they charged for legal services is “reasonable”
In all family law matters, an attorney is required by New Jersey Court Rule 5:3-5 to have a written retainer agreement with the client. However, even though you have agreed to pay a certain hourly rate or fee for a matter, the amount the attorney charges you for his/her services must be “reasonable” under the New Jersey Rules of Professional Conduct (R.P.C.) that all attorneys are obligated to follow.
The factors that make a fee “reasonable” are set forth in R.P.C. 1.5 and include:
- the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
- the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
- the fee customarily charged in the locality for similar legal services;
- the amount involved and the results obtained;
- the time limitations imposed by the client or by the circumstances;
- the nature and length of the professional relationship with the client;
- the experience, reputation, and ability of the lawyer or lawyers performing the services;
- whether the fee is fixed or contingent.
One of the classic cases, not from New Jersey, that law school ethics classes use to discuss this area is the case of the DUI where an experienced attorney who did not normally do DUI work took on a case and charged several times the going rate to represent a client, and through a novel legal idea managed to get them acquitted. Even though the results obtained were spectacular, the attorney was found to have committed an ethical violation in not charging a reasonable fee.
So, if the Fee Arbitration Committee finds in your favor, it is possible that the attorney in question may have violated the Rules of Professional Conduct. As set forth in New Jersey Court Rule 1:20A-4: “[I]n all cases it shall be the duty of each Fee Committee, after hearing and determination of the fee, to refer any matter that it concludes may involve ethical misconduct that raises a substantial question as to the attorney's honesty, trustworthiness or fitness as a lawyer in other respects (including overreaching) to the Director [of the Office of Attorney Ethics] for investigation.”
Fee Arbitration hearings and the decisions of the committee are confidential, so it is hard to know what type of cases or fact patterns are successful. This is something that is being challenged by organizations such as HALT, who believe that this enforced confidentiality is a violation of freedom of speech.
If you have a reasonable belief that your attorney has been unreasonable in the fees charged, then fee arbitration is an alternative dispute resolution mechanism that is worth considering as it allows the dispute with your attorney to be resolved in a timely manner and at low cost to both parties.
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