You are viewing an archived copy from the New Jersey State Library You are viewing an archived copy from the New Jersey State Library DISTRICT FEE ARBITRATION COMMITTEE MANUAL for Committees Appointed by the Supreme Court of New Jersey Prepared by OFFICE OF ATIORNEY ETHICS of the SUPREME COURT OF NEW JERSEY Richard J. Hughes Justice Complex CN963 Trenton, New Jersey 08625 609-292-8750 PUBLISHED1995 Sixth Edition 'i t «. ~G c sci, •. ! 11 )~ ret- l C.p You are viewing an archived copy from the New Jersey State Library You are viewing an archived copy from the New Jersey State Library Table of Contents Chapter 1 Fee Arbitration Overview 1-5 Section 1 Overview 1-5 The Process . 2-3 Substantive Fee Rules 4 Office of Attorney Ethics 4-5 Chapter 2 Composition of Committees 6-9 Section 2 Establishment 6-7 Section 3 Appointments 8 Section 4 Process. 8 .. Section 5 Size. 8 Section 6 Composition . 8 Section 7 Eligibility: Office, Residence, Political Activities 8 .. Section 8 Term Of Office . 8-9 Section 9 Continuation Beyond Full Term 9 Chapter 3 Fee Committee Organization 10-23 Section 10 Fee Committee Meetings · 10 Section 11 Organization Meeting . , · 10 Section 12 Establishing Hearing Panels . 10 Section 13 Regular Meetings ·"11 Section 14 Officers. · 11 .. Section 15 Chair 11-12 Section 16 Vice Chair. · 12 Section 17 Secretary · 12 Section 18 Principal Office · 12 Section 19 Case Screening 13-15 Section 20 Index Cards 15-18 Section 21 Docket Control 18-21 Section 22 Monthly Reports 21-22 Section 23 Emoluments . 22-23 Chapter 4 Jurisdictional and Related Issues 24-33 Section 24 Original Jurisdiction 24-27 Section 25 Federal Matters 27-28 Section 26 Bankruptcy Matters .28 Section 27 Prisoner Fee Disputes 28-31 'Section 28 Conflicts: Transferand Disqualification . 31-32 Section 29 Representation of Fee or Ethics Clients or Attorneys or Their Law Firms . .32 Section 30 Advisory Opinions .. 32-33 Section 31 Dual Complaints-Ethics and Fee .33 ... You are viewing an archived copy from the New Jersey State Library Chapter 5 Initiating The Fee Dispute Process 34-69 Section 32 Disposition Time . 34'=35 Section 33 Resources Available .35 • .4, • Section 34 Filing Fees. 36-38 Section 35 Request For Fee Arbitration . 38 Section 36 Service Upon Attorney 38-39 Section 37 Attorney Fee Response . 39-40 Section 38 Attorney's Failure to File or Pay .40 Section 39 Third Party Practice 40-41 Section 40 Subsequent Filings-Service Upon Parties .41 Section 41 Legal Representation .41 Section 42 Discovery . .41 Section 43 Subpoenas .42 Section 44 Settlement 42-44 Chapter 6 Conducting Fee Dispute Hearings 70-86 Section 45 Time For Scheduling Hearing .70 Section 46 Designation of Hearing Panel/Single Arbitrator 70-71 Section 47 Hearing Room . . .71 Section 48 Conduct of Formal Hearing 71-74 Section 49 Requests For Adjournment .74 Section 50 Withdrawal By Client 74-75 Section 51 Burden of Proof .75 Section 52 Standard of Proof .75 Section 53 Criteria for Determination. 75-77 Section 54 Arbitration Determination . 77-80 Section 55 Enforcing Arbitration Determinations and Settlements 80-86 Chapter 7 Fee Appeals 87-92 Section 56 Grounds for Appeal .87 Section 57 Procedure for Filing Appeal 87-90 Section 58 Effect of Notice of Appeal-Stay .90 Section 59 Committee Response to Appeal .90 Section 60 Response by Other Party to Appeal . 90 Section 61 Final Board Action 90-92 Chapter 8 Ancillary Matters 93-100 Section 62 Referral to Office of Attorney Ethics .93 Section 63 Usual Expenses-Emoluments .93 Section 64 Fees for Service of Committee Subpoenas 93-96 Section 65 Court Reporters -Transcripts . 96 Section 66. InterpretersfTranslators .. . 96 Section 67 Confidentiality . . . 96-97 Section 68 Interest on Fee Determination 97-98 Section 69 Pre-Action Notice to Client 98-99 Section 70 Immunity . . . 99 Section 71 Destruction of Fee Files . 99 Section 72 Americans With Disabilities Act (ADA) 99-100 ii You are viewing an archived copy from the New Jersey State Library TABLE OF FIGURES FIGURE Page 1. Geographic Committee Layout 7 2. Index Card .... 15 3a. Open Docket Sheet 19 b. Closed Docket Sheet 20 4. Filing Fee Transmittal Sheet 45 5a. Initial Request Forms to Client 46 b. Filing Fee Deficiency By Client 47 c. Dishonored Instrument By Client 48 d. Dismissal With Prejudice Caused By Client 49 6a. Initial Letter to Attorney . . . . . . . . . .50,51 b. Filing Fee Deficiency By Attorney . . . . . 52 c. Fee Response & Filing Fee Deficiency by Attomey 53 d. Bar to Attorney's Participation . 54 e. Dishonored instrument By Attorney. . . . . . . 55 f. · Bar to Attorney's Participation (Dishonored Rling Fee Check) 56 7. Hearing Panel Membership/Single Arbitrator . 57 8. Attorney Fee Arbitration Request Form .59,60 9. Fee Arbitration Information Pamphlet 61,62,63 ~-. 10. Attorney Fee Response Form . .64,65 11. Subpoena Duces Tecum . . 66 12. Subpoena Ad Testificandum 67 13. Stipulation of Settlement Form .68,69 14. Hearing Panel Checklist . . . . .. 72 15. Arbitration Determination Form. .78,79 16. Notification To Parties of Decision .81,82 17. Notice of Appeal . . . . . . . . 88,89 18. Appeal Acknowledgement letter 91 .. 19. OAEVoucher . . . . 94 Receipt For Payment 95 iii You are viewing an archived copy from the New Jersey State Library Section 1 Overview The New Jersey Attorney Fee Arbitration System is one of the simplest, and also one of the strongest, in the nation. Formerly a part of the county ethics committees, current attorney fee arbitration proceedings have been in existence since 1978. At that time, the Supreme Court of New Jersey created separate etbics committees and fee arbitration committees ("Fee Committees") throughout the state. This separation of the ethics and fee function was based in large measure upon the recognition that fee disputes were not disciplinary matters .and therefore should be treated separately. The Supreme Court of New Jersey recognizes that, while the number of cases handled by these Fee Committees may be .relatively small, their contribution to public confidence in the judicial system is significant: The overwhelming proportion of lawyers are able to maintain satisfactory relationships with clients concern­ ing fees. Where the relationship disintegrates over fee disputes, many lawyers will take the loss rather than sue. Fee arbitration is for the very few; itis used only a in those few instances when either lawyer is dissat­ isfied with the amount received and is willing to sue for satisfaction, or the client claims he is called upon to pay or has already paid too much and wants to reduce the lawyer's claim or get some money back. Though the matters which come to fee arbitration represent a very small proportion of the total number of fee relationships, they are among the most visible .matters to a public , greatly concerned about how the judicial system deals with attorney-client disputes. Our success in estab­ lishing a fair fee arbitration system will do much to assure the public of the fairness of the judicial system as a whole, and thereby increase the public confidence that is so necessary for that system to operate effec­ tively. In re liVolsi, 85 N.J. 576, 604 (1981). The.system has'been designed to be fair, fast and inexpensive. Any client of a New Jersey attorney who believes that he or she has been overcharged by a member of the bar may have the lawyer's fee reviewed without incurring the expense of formal litigation. 1 You are viewing an archived copy from the New Jersey State Library The Process The fee arbitration process is a model of simplicity. It is a two-tiered system that operates statewide. The two levels on which fee arbitration is conducted are: a. Regionalized District Fee Arbitration Commit­ tees (Fee Committees), supervised and as­ sisted by the Office of Attorney Ethics (OAE), and b. A statewide Disciplinary Review Board (Board). Fee Committees are organized along geographic lines (usually counties) that are identical to ethics committee districts. (See Figure 1, Section 2). Fee arbitration in New Jersey is initiated by a client's filing of a request form with the Secretary of the Fee Committee in the district where the lawyer maintains an office for the practice of law. Effective March 1, 1993 non-refundable filing fees are required to be paid by both the client and the attorney at the time of filing of the Fee Request Form and Attorney Fee Response as follows: No Fee - where the total fee charged (excluding costs) is less than $1,000 $25.00 - where the total fee charged (excluding costs) is from $1,000 to $2,999 $50.00 - where the total fee charged (excluding costs) is $3,000 or more. Since New Jersey's program is mandatory on the part of lawyers, the request form requires the client's consent to be bound by the results of the fee arbitration process. Attorneys are required to file an Attorney Fee Response in which they provide the Fee Committee with needed factual information in response to the client's request. Fee Committees do not render advisory opinions but, rather, adjudicate fee controversies between lawyers and clients. Since April 1, 1979 Fee Committees have been composed of both lawyers and public members. Fee arbitration cases are usually heard before panels of three members, composed of two lawyers and one public. member. 2 Section 1 You are viewing an archived copy from the New Jersey State Library Hearings are scheduled upon ten days written notice. There is no discovery. However, all parties have the power of subpoena, subject to rules of relevancy and materiality. No stenographic or other transcript of the pro­ d ceedings is maintained, unless ordered by the Board or the Director. All :s proceedings are conducted formally and in private, but the strict rules of evidence need not be observed. If the total amount of the fee charged is less than $3,000, the hearing may be held before a single attorney member of the Fee Committee. A written Arbitration Determination, including a monetary synopsis of the findings together with a brief statement of reasons, is required to be mailed to the parties notifying them of the arbitration decision within 30 days after the conclusion of the hearing. A limited right of appeal from a determination of a Fee Committee to the statewide Disciplinary Review Board is provided. The grounds for such an i) appeal are as follows: ). a. Failure of a member to be disqualified in accord­ n ance with R. 1: 12-1; b. 'Failure of the Fee Committee to substantially d comply with mandatory procedural require­ it ments; c. Actual fraud on the part of any member of the Fee Committee, or d. Obvious mistake of law by the Fee Committee which has led to an unjust result. An appeal may be taken within 21 days after receipt of the Fee Committee's written determination by filing a notice of appeal in the form prescribed by the Board. The timely filing of a notice of appeal acts as an automatic stay of the execution of any judgment obtained based upon the Fee Committee's e Arbitration Determination. All appeals are heard by the Board on the written e record. The Board's decision is final. e In addition to hearing appeals, the Board also hears motions made by the 31 OAE to enforce payment of refunds which have been ordered to be made by It .­ attorneys to clients. If the Board determines that a refund has improperly n been withheld, it may recommend to the Supreme Court that the attorney be suspended from the practice of law until compliance is achieved. The 's Board can also impose additional monetary sanctions on the delinquent s JO attorney for failing abide by the Fee Committee's ruling. r. 3 You are viewing an archived copy from the New Jersey State Library Substantive Fee Rules In recent years the Supreme Court has adopted several rules designed to encourage early communication about legal charges between lawyer and client. New Jersey has been a leader nationally in this area. One such rule (R. 1:21-7), which has been in existence since 1971, requires written contingent fee agreements with clients in tort and negligence matters. These matters are also subject to specific maximum legal fee limits established by the Supreme Court. Another more recent rule (R. 1:21-7A) regarding retainer agreements in matrimonial matters was adopted by the Supreme Court on May 24, 1982 and became effective September 13, 1982. That rule requires all agreements for legal services in matrimonial actions to be in writing and to be signed by both the lawyer and the client. In 1984, New Jersey became the first state in the nation to adopt the American Bar Association's Model Rules of Professional Conduct. RPC 1.5 governing "Fees" was modified for adoption in New Jersey in order to insure communications on fees between lawyers and clients at the inception of the relationship. The New Jersey rule provides in subsection (b): When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated in writ­ ing to the client before or within a reasonable time after commencing the representation. Additionally, RPC 1.5(cJ requires that all contingent fee agreements be in writing. It can hardly be doubted that surprise and consequent ·dissat isf ac-· tion at a lawyer's final bill will decrease when the lawyer and client discuss, and reach agreement as to, the basis for the lawyer's charges at the inception of the relationship. The Office of Attorney Ethics In October 1983, the Supreme Court of New Jersey established the Office of Attorney Ethics (OAE) in order to manage all district fee arbitration and ethics committees throughout the state. The OAE has broad administrative and managerial powers over both fee and ethics committees. It renders legal and procedural advice to Fee Committees and takes action before .the Disciplinary Review Board to enforce refunds of fees, through temporary suspensions, where refunds are not made in accordance with a Fee Commit­ tee's determination. 4 Section 1