Lawyers Can Compel Arbitration Over Fees

(CN) - When attorneys are locked in fee disputes with their clients, the Mandatory Fee Arbitration Act's trial de novo provision does not prevent lawyers from enforcing arbitration contracts, the California Supreme Court ruled.

The MFAA compels arbitration when both parties agree to it in writing. Otherwise, either party can request a trial de novo within 30 days of arbitration.

The state high court previously held that a client who waived MFAA arbitration could not oppose a motion to compel arbitration under the California Arbitration Act (CAA) by invoking the trial de novo provision of the MFAA.

But the justices never considered whether a client who chooses MFAA arbitration can request a trial de novo after arbitration has concluded, defeating the attorney's motion to compel arbitration under the CAA.

The appeals court ruled that the MFAA's "right to trial de novo after statutory arbitration defeats any contractual obligation to arbitrate attorney-client fee disputes," the high court explained.

The high court disagreed. "Although the language of the statute is not entirely free from ambiguity," Justice Moreno wrote, "construing the statute in light of the presumption against implied repeal leads to the conclusion that the MFAA does not limit the ability of attorneys and clients to enter into binding contractual arbitration."

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