Karon Law Blog

No Contingent Fee Agreement Should Include Forced Arbitration

Posted January 17, 2025

By Jonathan A. Karon

No personal injury attorney should ever ask you to sign a contingent fee agreement that requires that you resolve any disputes with your attorney by binding arbitration. I’ve done numerous blog posts discussing the unfairness of forced arbitration clauses and how many large corporations including Disney and Uber are trying to take away their customers’ rights to a jury trial and force them to resolve their claims in private, one-sided arbitrations. ( “Disney’s Whole New World of Arbitration Agreements” https://www.karonlaw.net/blog/?id=813 “Uber Doesn’t Want You to Have a Lawyer” https://www.karonlaw.net/blog/?id=810) Most personal injury lawyers have, at one time or another, had to ask a court not to enforce an unfair mandatory arbitration clause. (Some very bad Supreme Court decisions have made this very difficult).

So I was surprised to learn that apparently some personal injury lawyers include mandatory arbitration clauses in their contingent fee agreements which require that clients submit any disputes, including legal malpractice claims and disputes over legal fees, to binding arbitration. In my view this is hypocritical and reprehensible. Arbitration can be a good way to resolve some disputes, but only if both sides voluntarily agree and get an equal say in selecting the arbitrator and the rules that will be followed. In fact, the Massachusetts Bar Association has a legal Fee Arbitration Board which “provides an alternative to litigation in the Small Claims, District, or Superior Courts through voluntary binding arbitration and/or mediation.” https://www.massbar.org/membership/fee-arbitration-board. But you should have the choice as to whether to go that route, not just your attorney.

The Massachusetts Supreme Judicial Court has specific rules for contingent fee agreements which include model language for contingent fee agreements. The rules require that if any provision of a fee agreement differs from the model language the client must be advised that these provisions differ from the model agreement and the client must confirm their agreement to these different terms in writing. Supreme Judicial Court Rule of Professional Conduct 1.5 (f)(3). https://www.mass.gov/supreme-judicial-court-rules/rules-of-professional-conduct-rule-15-fees The Official Comment to the Rule states, “ a provision requiring that fee disputes be resolved by arbitration is a provision that differs materially from the forms of contingent fee agreement set forth in this rule and is subject to the prerequisite that the lawyer explain the provision and obtain the client’s consent, confirmed in Writing.” So, although mandatory arbitration provisions are not prohibited by law in contingent fee agreements, the lawyer must call your attention to it, explain that this differs from the model fee agreement and obtain your specific written consent to it.

Of course, just because you’re allowed to do something doesn’t mean you should do it.
No reputable plaintiff attorneys I know include mandatory arbitration clauses in their fee agreements. The American Association for Justice (AAJ) is the leading nationwide organization of plaintiff attorneys. Its Code of Conduct requires that members “include no pre-dispute mandatory binding arbitration clauses in agreements with clients.” https://www.justice.org/about-us/aaj-code-of-conduct-and-professionalism Membership in AAJ is voluntary, but this shows that leading plaintiff attorneys think including mandatory arbitration in fee agreements is wrong.

My advice is that if a lawyer wants you to sign a contingent fee agreement that requires mandatory arbitration, you should find a different lawyer. There are plenty of competent, experienced personal injury lawyers who will never insist a client sign a mandatory arbitration provision. Including me.