Can a lawyer put a clause in the client agreement sending fee, file, malpractice, and ethics disputes to a named ADR program?

Plain-English summary

A lawyer asked whether a client agreement could refer disputes over fees, possession of the file, malpractice, and unethical conduct to a named alternative dispute resolution program.

The opinion drew a line between the malpractice-related categories and the ethics category. For fees, ADR has generally been permitted under RI-2, which balances the policy favoring arbitration against the concern that an unfettered arbitration clause could let a lawyer impliedly limit malpractice liability with little appellate review, applying MRPC 1.8(h)'s bar on agreements prospectively limiting malpractice liability unless the client is independently represented. The opinion concluded that fee, file, and malpractice disputes may be sent to ADR because such clauses address only the forum, not the lawyer's duty of care or liability (citing California Op 1989-116), but conditioned each on giving the client the opportunity to obtain independent counsel about the advisability of the agreement (citing District of Columbia Op 211).

For disputes over the lawyer's breach of ethical rules, the opinion concluded ADR is not permitted. Extending RI-88, which bars a lawyer from agreeing to restrict a party or counsel from bringing misconduct information to the Attorney Grievance Commission, the opinion reasoned that an agreement directing ethics disputes to ADR would restrict the client's ability to report misconduct. Because a lawyer is also an officer of the legal system with responsibility for the quality of justice (MRPC 1.0), and enforcement of ethics rules serves a purpose beyond redressing a single client's injury, the opinion concluded ethical disputes cannot be resolved by agreement between lawyer and client, and this bar cannot be cured by having the client obtain independent counsel.

Currency note

This opinion was issued in 1996, before later amendments to the Michigan Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a client agreement send fee disputes to arbitration or mediation?

A: Yes. The opinion concluded that, consistent with RI-2, fee disputes may be referred to ADR if the client is given the opportunity to obtain independent counsel about the agreement.

Q: Can malpractice claims be sent to ADR?

A: Yes, with a condition. The opinion concluded that an ADR clause addresses only the forum, not the duty or liability, so it does not violate MRPC 1.8(h), provided the client is given the chance to obtain independent counsel.

Q: Can disputes about the lawyer's ethics be sent to ADR?

A: No. The opinion concluded that, extending RI-88, a lawyer may not agree to route ethics disputes to ADR, because doing so would restrict the client's ability to report misconduct to the Attorney Grievance Commission.

Q: Does independent counsel cure the ethics-dispute problem?

A: No. The opinion concluded the bar on ADR for ethical disputes cannot be cured by having the client obtain independent counsel, because enforcement of ethics rules serves the public, not just the individual client.

Background and rules framework

The opinion interpreted MRPC 1.8(h) (Model Rule 1.8), which bars an agreement prospectively limiting malpractice liability unless permitted by law and the client is independently represented, and MRPC 1.0 (the preamble/scope provision), which describes the lawyer as an officer of the legal system with responsibility for the quality of justice. It relied on RI-2 (ADR for fee disputes) and RI-88 (no agreement restricting reports to the Attorney Grievance Commission), and cited California Op 1989-116, District of Columbia Op 211, and North Carolina Op 107.

Citations and references

Rules of Professional Conduct:

• MR 1.8 / MRPC 1.8(h) (no prospective limit on malpractice liability absent independent representation)
• MRPC 1.0 (lawyer as officer of the legal system)

Other opinions cited:

• Michigan RI-2: ADR for fee disputes
• Michigan RI-88: no agreement restricting reports of misconduct to the Attorney Grievance Commission
• California Op 1989-116; District of Columbia Op 211; North Carolina Op 107: ADR clauses in client agreements

See also

• Mich Ethics Op. RI-196: limits on an arbitration clause in a retainer agreement
• Mich Ethics Op. RI-88: no settlement that bars reporting misconduct
• Mich Ethics Op. RI-220: settlement offer conditioned on withholding a grievance

Source

• Landing page: https://www.michbar.org/opinions/ethics/numbered_opinions?OpinionID=1127&Type=6

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

RI-257

April 8, 1996

SYLLABUS

A lawyer may enter into an agreement with a client that disputes arising out of the representation, including disputes regarding fees, possession of files and malpractice, will be resolved in a named alternate dispute resolution program, provided the client obtains independent counsel concerning the advisability of entering into the agreement.

A lawyer may not enter into an agreement with a client that disputes arising out of the representation pertaining to the lawyer's ethical conduct will be resolved in a named alternate dispute resolution program.

References: MRPC 1.0, 1.8(h), RI-2, RI-88.

TEXT

A lawyer inquires as to the ethical appropriateness of entering into an agreement with a client, which provides that disputes over fees, possession of file, malpractice and unethical conduct would be referred to an alternate dispute resolution program.

Entering into such an agreement for ADR of fee disputes has been generally permitted in Michigan under RI-2. RI-2 balances the public policy preference for settlement via arbitration with the concern that an unfettered arbitration clause would permit a lawyer to impliedly limit the liability for malpractice with little opportunity for appellate review. In resolving this conflict, the Committee has strictly applied MRPC 1.8(h), which provides:

"(h) A lawyer shall not make an agreement prospectively limiting the lawyer's liability to a client for malpractice unless permitted by law and the client is independently represented in making the agreement."

A lawyer may include ADR provision for fee disputes within the fee agreement, provided that the client obtains independent counsel concerning the advisability of entering into such agreement.

Issues over client file usually arise in the context of a lawyer's withholding release of the file pending payment of fees for services. Hence, it is appropriate that disputes over fees and retention of client files would be resolved as part of the ADR process. Further, merely contracting for ADR on issues of professional malpractice does not violate MRPC 1.8(h). As other ethics opinions have noted, when used appropriately such provisions in fee agreements only address the forum in which liability will be determined, not the duty of the lawyer to exercise reasonable are nor the liability for breach of that duty. California State Bar Op 1989-116. However, applying MRPC 1.8(h) to protect against potential abuse of an overreaching lawyer, inclusion of such an ADR clause over file disputes and malpractice claims should be conditioned, again, on the client being given the opportunity to obtain independent counsel concerning the advisability of entering into such agreement. See District of Columbia Op 211 (5/15/90).

Contractual ADR on the issues of a lawyer's breach of ethical rules is not as easily resolved. There are ethics opinions which suggest that inclusion of an all inclusive ADR clause with a disclaimer reserving ultimate disposition of ethical issues for the respective state bar organizations is permissible. See North Carolina Op 107 (1/17/91).

RI-88 prohibits a lawyer from entering into an agreement restricting a party or counsel from bringing information concerning a lawyer's ethical misconduct to the attention of the Attorney Grievance Commission. This prohibition recognizes the exclusive and ultimate authority of the Attorney Grievance Commission and the Attorney Discipline Board over the disposition of ethical issues and that such authority shall not be abridged by agreement with another party or counsel or used as a tool of settlement.

A logical extension of RI-88 would prohibit a lawyer from entering into any agreement with a client directing such disputes be settled in ADR, thereby restricting the client's ability to report the lawyer's misconduct to appropriate authorities. Michigan's ethics rules recognize that a lawyer is more than just the client's representative, but is also an officer of the legal system and a public citizen having special responsibility for the quality of justice. MRPC 1.0. Without disregarding the substantial impact on a client from a lawyer's breach of ethics, enforceability of ethics rules has a greater purpose than rectifying just the injustice done to a single client. Hence, ethical disputes cannot be resolved by agreement between the lawyer and client alone, and this prohibition cannot be cured by having the client obtain independent counsel concerning the advisability of entering into such agreement.