In Ramkelawan v. Morgan & Morgan, P.A., (3D21-1143 October 20,2021) the Third District Court of Appeal in Florida upheld a malpractice arbitration clause in the defendant’s retainer agreement. Under Florida Rule of Professional Conduct 4-1.5(i) an attorney may not make an agreement for mandatory arbitration unless it contains specific language in bold type. The clause in the retainer agreement made minor changes in the language specified in the rule. However, the appellate court found that the language used in the arbitration clause “conforms in all material respects” with the rule.
The arbitration clause used by the firm went beyond the mandatory language of the Florida Rule; the clause contains a detailed description of the scope and terms of arbitration and the consequences of the agreement, including waiver of the client’s right to bring a case in court, right to a jury trial, right to broad discovery, and the right to appeal. The clause, which is quoted in full below, provides an excellent example of the type of language that has a high likelihood of enforceability. Of course, local law must always be consulted regarding the enforceability of arbitration clauses in engagement agreements. In particular, the clause should be coordinated with rules providing for arbitration of fee disputes. For a discussion of these issues under South Carolina law and rules of ethics, see Nathan M. Crystal, Annotated South Carolina Rules of Professional Conduct 77-78 (2021 ed.). The clause involved in the Morgan & Morgan case including the mandatory disclosure required by Florida Rules was as follows:
By executing this fee agreement I agree that, with one exception, any and all disputes between me and The Firm arising out of this agreement, The Firm’s relationship with me or The Firm’s performance of any past, current or future legal services, whether those services are subject of this particular agreement or otherwise, will be resolved through a binding arbitration proceeding to be conducted under the auspices of the Commercial Arbitration Rules of the American Arbitration Association in Orlando, Orange County, Florida. The disputes subject to binding arbitration will include without limitation, disputes regarding attorney’s fees or costs, and those alleging negligence, malpractice, breach of fiduciary duty, fraud or any claim based upon a statute. Both the agreement of the parties to arbitrate all disputes and the results and awards rendered through the arbitration will be final and binding on me and The Firm and may be specifically enforced by legal proceedings. Arbitration will be the sole means of resolving such disputes, and both parties waive their rights to resolve disputes by court proceedings or any other means. The parties have agreed that judgment may be entered on the award of any court of competent jurisdiction in the state of Florida and, therefore, any award rendered shall be binding. The arbitrator may not consolidate more than one person’s claims, and may not otherwise preside over any form of a representative or class proceeding. The one exception to my agreement to arbitrate concerns ethical grievances which I may have. Nothing in this agreement limits, in any way, my right to pursue any ethical grievance against The Firm as permitted by applicable law.
I understand that by agreeing to arbitration as a mechanism to resolve all potential controversies, disputes or claims between us, I am waiving certain rights, including the right to bring an action in court, the right to a jury trial, the right to broad discovery, and the right to an appeal. I understand that in the context of arbitration, a case is decided by an arbitrator (one or more), not by a judge or jury. I agree that, in the event of such controversy, dispute, or claim between us, the prevailing party will be entitled to recover from the losing party all costs and expenses he, she, or it incurs in bringing and prosecuting, or defending, the arbitration, including reasonable attorney’s fees and costs.
I have been advised to review this contract carefully to be certain that it accurately sets forth our agreement. In the event that I do not understand anything in this agreement, I will let The Firm know so further written explanation can be provided.
NOTICE: I am aware this agreement contains provisions requiring arbitration of fee disputes. I am aware I should consult with another lawyer about the advisability of making an agreement with mandatory arbitration requirements. Arbitration proceedings are ways to resolve disputes without use of the court system. By entering into agreements that require arbitration, I give up (waive) my right to go to court to resolve those disputes by a judge or jury. These are important rights that should not be given up without careful consideration.
In 2017, I coauthored (with Francesca Giannoni-Crystal) an article that discusses choice of law (“COL”) and choice of forum (“COF”) clauses in lawyers’ engagement agreements. After analyzing the case law dealing with enforceability of these clauses (and showing a wide divergence among the courts in approach and results regarding enforcement of these clauses), we concluded that in our opinion COF clauses (unlike COL clauses) should be subject to informed consent because of the potential burden that could be placed on a client who would be required to litigate against an attorney in a jurisdiction other than the client’s home jurisdiction. Francesca Giannoni-Crystal & Nathan M. Crystal, Choice of Law in Lawyers’. Engagement Agreements, 121 Dick. L. Rev. 683 (2017). Available at: https://ideas.dickinsonlaw.psu.edu/dlra/vol121/iss3/3 Choice of Law in Lawyers’ Engagement Agreements, 121 Penn St. L. Rev. 683 (2017). I believe that the clause in Ramkelawan goes as far as it can in securing the informed consent of the client. I want to point out that the bold language containing the invitation to seek the advice of other counsel is required by the Florida rule and it is not expressly required by the model rules. One could should consider inserting that invitation anyway as part of the concept of informed consent.