FAQs Concerning Representation of Attorneys in NJ Office of Attorney Ethics Fee Arbitration Disputes

The Nissenbaum Law Group has an ethics defense team for attorneys who are either (a) seeking payment of their attorney’s fees and costs or (b) responding to objections to their invoices filed by their clients. This is typically done through the special mechanism the New Jersey Supreme Court has created for fee arbitration, However,—as set forth below—if the client waives their right to such fee arbitration, a party may institute an action in the Superior Court of New Jersey or, if the retainer agreement authorizes it, through a standard commercial arbitration

There is an important distinction between the Office of Attorney Ethics’ Fee Arbitration and such normal commercial arbitration in which businesses dispute or seek to enforce a contractual obligation for payment. For example, in the latter situation the underlying contract will frequently contain an arbitration provision under which both sides split the costs of the private arbitrator. However, the program overseen by the New Jersey Office of Attorney Ethics provides for free fee arbitration that is handled by volunteers appointed to the applicable fee arbitration committee in the venue that is reasonably related to the dispute. The following are frequently asked questions respecting the NJ Office of Attorney Ethics fee arbitration process.

FAQ #1: What is a pre-action notice and how does the failure to file one within the required deadline impact the manner in which the fee dispute will be handled?

At the outset, it is important to note that a lawyer cannot sue a client in Superior Court relating to unpaid attorney’s fees unless the client is first given the opportunity to choose fee arbitration as an alternative. This requirement is contained in R. 1:20A-6 which states in pertinent part

No lawsuit to recover a fee may be filed until the expiration of the 30 day period herein giving Pre-action Notice to a client; however, this shall not prevent a lawyer from instituting any ancillary legal action. Pre-action Notice shall be given in writing, which shall be sent by certified mail and regular mail to the last known address of the client, or, alternatively, hand delivered to the client, and which shall contain the name, address and telephone number of the current secretary of the Fee Committee in a district where the lawyer maintains an office.

Should the client not respond by “communicat[ing] with the Fee Committee Secretary and fil[ing] the approved form of request for fee arbitration within 30 days of receiving pre-action notice,” the client will be deemed to have waived their right to fee arbitration. Id. At that point, presumably the attorney will be allowed to file the claim in the Superior Court. However, if that is done, the attorney must allege in their complaint that the pre-action notice was provided to the client and presumably that the relevant time period to respond expired. Id.

FAQ #2: Does the fee arbitration process provide a formal mechanism by which the attorney is given the opportunity to respond?

Once the fee arbitration process is initiated, the secretary of the fee arbitration committee is required to send an Attorney Fee Response form to the lawyer in the format approved by the director of the Office of Attorney Ethics. The attorney is required to return the completed form within 20 days, as well as provide the required filing fee. The client must also be served with the response. District Fee Arbitration Committee Manual, NJ Office of Attorney Ethics (“OAE Manual”) (Sixth Edition 1995) at 39-40.

FAQ #3: May the attorney be represented in the process by an outside law firm

Both the attorney and their client may be represented in the process. R. 1:20A-3(b)(4). (“Both the client and the attorney whose fee is questioned shall have the right to be present at all times during the hearing with their attorneys, if any.”)

As a matter of fact, there is also a procedure to allow an out-of-state attorney to be admitted pro hac vice for this purpose. R. 1:21-2. See OAE Manual at 41.

FAQ #4: Is there a procedure to issue subpoenas in regard to the fee arbitration process?

The attorney and their client are both entitled to issue subpoenas to obtain witness testimony and documents. The unusual aspect of this is that such subpoenas are sent “in the name of the fee committee and may be signed by the Secretary or any Fee Committee member.” OAE Manual at 42.

The fee committee itself can issue its own subpoenas, sua sponte. Likewise, “the Chair of the Fee Committee, or of the hearing panel, may request a showing of good cause for the issuance of requested subpoenas, and may deny the issuance of subpoenas where there is patently no necessity or relevance for the evidence or witnesses.” OAE Manual at 42. Importantly, “motions to quash or limit testimony, or to protect a witness must be addressed to the Fee Committee Chair for disposition, or to the Chair of the hearing panel.” Id.

FAQ #5: Can the fee arbitration matter be settled and if so, what is the general manner in which that should be done?

There is a standard form that the OAE uses for a stipulation of settlement.  It is incorporated in the manual cited above. See OAE Manual at Figure 13. It should include a “synopsis of the original fees charged, the total amount of the fees agreed upon, and either the balance due by the client or the amount to be refunded by the attorney.” See OAE Manual at 42.

Importantly, if the client does not reply with a stipulated settlement involving monies that the client will be paying the attorney, the attorney has four options

(a) obtain judgment in the amount of the Stipulation with the client expressly waiving all right to defend the matter on the merits;

(b) re-open the fee arbitration matter and have the reasonable amount of the fee decided by the Fee Committee;

(c) proceed upon any default or other judgment already obtained, or

(d) bring legal proceedings to collect the total bill alleged to be due and owing.

Id. at 43-44.

The Firm’s Approach to New Jersey Attorney Ethics Matters

The Nissenbaum Law Group stands ready to represent attorneys in New Jersey Office of Attorney Ethics Fee Arbitration Committee matters. Click here to learn more about the firm’s New Jersey ethics defense practice.¹ 

¹ From time to time, the Court Rules, Rules of Professional Conduct and prevailing law may change. Therefore, before relying on this or any other matters discussed on the within webpage, we suggest you review the most up to date version of them that is relevant.