RULE 7. Fee Arbitration Commission
(1) Appointment The Board shall appoint five or more Fee Arbitration Commission panels, each of which shall be assigned a geographic region of the state. Each panel shall consist of two attorneys licensed to practice law in Maine and one public member who is a Maine resident. The Board shall appoint alternate attorneys and public members to serve on the Fee Arbitration Commission as members at large. Each year the Board shall also appoint a Chair and Vice Chair of the Fee Arbitration Commission from among the Commission’s attorney members. The Chair or Vice Chair shall appoint one of the attorney members of each panel to chair that panel.
(2) Terms of Office. Panel members shall be appointed for a term of four years. No member shall serve more than two consecutive four-year terms. A member whose term has expired may continue to serve on any case that was commenced before the expiration of the member's term. As each regular member's term of office on the Fee Arbitration Commission expires, a successor shall be appointed for no more than two consecutive full terms but a regular member appointed for less than a full term (originally or to fill a vacancy) may serve two additional full terms. A member who has served two consecutive four-year terms may not be reappointed before the expiration of at least one year. Members shall not be subject to removal by the Board during their terms of office except for cause.
(3) Representation Prohibition. No member of the Fee Arbitration Commission may be legal counsel for a party in any proceedings under these Rules. When a member of the Commission member’s firm serves as legal counsel for a party in any proceeding under this rule, the Commission member may perform Commission responsibilities unrelated to that proceeding, provided that the Commission member is timely screened from any participation in or relating to that proceeding, at both the Commission member’s firm and the Commission.
(4) Upon conclusion of service, members shall take reasonable steps to destroy all documents, in paper or electronic format, relating to the proceedings of the Board subject to the confidentiality provisions of these Rules.
(b) Powers and Duties. The Fee Arbitration Commission shall have the following powers and duties:
(1) to interpret this rule;
(2) to approve forms;
(3) to establish written procedures that afford a full and equal opportunity to all parties to present relevant evidence;
(4) to educate the public and the bar about the Fee Arbitration Commission; and
(5) to perform all acts necessary for the effective operation of the Fee Arbitration Commission.
(c) Board Clerk. The Board Clerk shall perform the administrative functions of the Commission. The Board Clerk shall have the following powers and duties:
(1) to keep and maintain records of all petitioners and respondents, as well as all proceedings, determinations and awards of the Fee Arbitration Commission;
(2) to process Fee Arbitration cases and communicate with parties to the dispute;
(3) to schedule Fee Arbitration hearings;
(4) to process and disseminate Arbitration Awards to the appropriate groups and parties; and
(5) to perform such additional duties as may be assigned by the Board or the Fee Arbitration Commission.
(1) Initiation of Proceedings. Proceedings before the Fee Arbitration Commission shall be initiated upon receipt of a petition regarding legal fees and/or costs paid to or charged by an attorney providing legal services in Maine. The petitioner shall:
(A) set forth the petitioner's full name and current address and the attorney with whom the petitioner has a dispute;
(B) agree to be bound by the decision of a Fee Arbitration Panel;
(C) represent that the petitioner has made a good faith effort to resolve the dispute with the attorney involved before filing the petition; and
(D) state whether the dispute is the present subject of legal action and certify that the matter has not been finally adjudicated by a court or administrative agency. If the dispute is currently the subject of other judicial or administrative proceedings, such proceedings shall be identified in the petition.
(2) Pending Action. If there is a pending action or proceeding before a Maine court or agency involving the disputed fees, then such matter shall, upon motion of the petitioner, be stayed by that tribunal until such dispute is resolved pursuant to this rule, and the award hereunder shall be determinative of the action so stayed.
(3) Preliminary Review by Board Clerk. Upon filing, a petition shall be expeditiously reviewed by the Board Clerk. If the Board Clerk determines that there are no just grounds for the dispute, or that the matter is moot, or that the arbitrationwhas not commenced within six years from the time the bill in dispute was rendered or the fee paid in whole or part, whichever occurs first, the Board Clerk may recommend that the Chair or Vice Chair of the Fee Arbitration Commission dismiss the matter. When recommending a dismissal, the Board Clerk shall provide a concise written statement of the facts and reasons why a matter should be dismissed to the Chair or Vice Chair of the Fee Arbitration Commission. If the Chair or Vice Chair concurs with the Board Clerk's recommendations, the matter shall be closed and the petitioner so advised. If the Chair or Vice Chair rejects the Board Clerk's recommendations, the matter shall proceed under this rule.
(4) Petition Filed by Non-Client. When a petition is filed by a non-client of the named respondent attorney, the Board Clerk shall provide the client with notice of the petition and request that within 10 days the client consent in writing to the filing and processing of the petition under this rule. Should the client fail to provide consent, the Board Clerk shall refer the matter to the Chair or Vice Chair for determination whether any action under this rule is appropriate for the Fee Arbitration Commission or if dismissal is required.
(5) Notice to Respondent. A blank form captioned "Respondent's Reply and Submission to Arbitration" shall be forwarded to the respondent. If the respondent fails, without good cause, to file a reply within 30 days after the mailing, the panel may proceed to hear the petition and make its findings and award upon the evidence produced by the petitioner. The panel may, at its discretion, refuse to consider evidence offered by the respondent that would reasonably be expected to have been disclosed in the Respondent's Reply. Upon receipt of Respondent’s Reply, the Board Clerk shall forward a copy of the same to the petitioner.
(6) Notice of Client's Right to Arbitrate Legal Fees. At least 30 days before service or filing of a complaint in a civil action against an attorney's client or former client (hereinafter client) to recover fees for professional services previously rendered and/or costs incurred for which no judgment has previously been obtained, an attorney shall mail to the client at the client's last known address, and to the person liable for the payment of the attorney’s fees if other than the client, at that person's last known addresses, a written notice of the right to arbitrate, which shall include the following language:
You currently owe the sum of $____ in legal fees [and costs] to [name of attorney or firm]. If you dispute the fact that you owe any part of the amount claimed to be due, you have the right to have the matter resolved without additional expense to you by arbitration before a panel of the Fee Arbitration Commission. Forms and instructions for filing a petition for arbitration are available from the Board of Overseers of the Bar [insert Board address, phone number and website URL].
(7) Failure to Give Notice. No attorney shall seek to enforce a judgment against a client for attorney fees or costs which have been entered without having provided that client with the required notice of the right to arbitrate as set forth above.
(8) Referral to Arbitration Panel.
(A) Panel Composition. After notification of appointment to a panel, assigned panel members shall notify the Board Clerk of any conflict of interest with a party to the arbitration. Upon notification of the conflict, the Board Clerk shall appoint a replacement from the list of Fee Arbitration Commission members. Parties may object in writing to the composition of a panel, and the Fee Arbitration Commission may relieve the disqualified panel member and appoint a replacement.
(B) Notice of Hearing. The Board Clerk shall make a reasonable effort to assign the matter for hearing within 60 days after the date of receipt of the petition. The Board Clerk shall also provide petitioner and the respondent written notice of the date, time and place of hearing.
(C) Dismissal. If not earlier resolved pursuant to Rule 7(d)(3), a petition shall later be dismissed by the Board Clerk upon the petitioner's submission of a written request for dismissal prior to the respondent's filing of a reply to the dispute. After the respondent files a reply to the dispute, the petition shall not otherwise be dismissed except by order of the chair of the assigned hearing panel or of the Chair or Vice Chair of the Fee Arbitration Commission.
(9) Right to Counsel. Each party to a dispute shall have the right to be represented at the party's own expense by an attorney at any stage of the arbitration. For cause shown, or on its own motion, the Chair or Vice Chair may, in its discretion, authorize the Board Clerk to obtain the volunteer services of and assign an attorney to represent either the petitioner or the respondent in any proceeding before the panel.
(10) Communications. Any notice or other communication required by this rule shall be sufficient if in accordance with the requirements of Rule 15. Notice to a petitioner shall be made to the address set forth by petitioner in the petition.
(e) Arbitration Hearing.
(1) If, at the time set for a hearing before a panel, three members are not present, the chair of the panel, or in the event of the chair's unavailability, the other members present, may decide either to postpone the hearing, or, with the written consent of those parties present, to proceed with the hearing with two panel members, one of whom must be a public member.
(2) If any member of a panel dies or becomes unable to continue to act while the matter is pending and before an award has been issued, the proceedings to that point shall be declared null and void and the matter assigned to a new panel for rehearing unless the parties, with the consent of the panel chair, or in the event of the chair's unavailability, the Chair or Vice Chair of the Fee Arbitration Commission, consent to proceed with the remaining panel members, one of whom must be a public member.
(3) The members of the arbitration panels shall be vested with all of the powers, and shall assume all of the relevant duties, granted and imposed upon neutral arbitrators by the Uniform Arbitration Act, 14 M.R.S. § 5927 et seq., to the extent that the same is not in conflict with this rule.
(4) On the hearing date, the arbitration panel shall meet, take testimony, receive other evidence and otherwise conduct an impartial, fair and expeditious hearing on the matter. The panel shall accept such evidence as is relevant and material to the dispute and request additional evidence as necessary to understand and resolve the dispute. The parties shall be entitled to be heard, to present evidence and to cross-examine parties and witnesses. The panel shall judge the relevance and materiality of the evidence.
(5) Upon request of a party or upon its own determination, a panel or its chair may, for good cause shown, adjourn or postpone the hearing.
(6) The chair of the panel shall preside at the hearing. For purposes of admissibility, the chair shall be the judge of the relevance and materiality of the evidence offered and shall rule on questions of procedure. The chair shall exercise all powers relating to the conduct of the hearing. Evidence shall be admitted if it is the kind of evidence upon which reasonable persons are accustomed to rely in the conduct of serious affairs. The panel may exclude irrelevant, unduly repetitious, or unduly prejudicial evidence. The Maine Rules of Evidence shall not apply at the hearing.
(7) The petitioner and the respondent, or counsel representing either of them, shall be entitled to be heard, to present evidence and to cross-examine parties and witnesses appearing at the hearing. In addition, any panel member shall be entitled to make inquiries of any party or witness at the hearing. The testimony of witnesses shall be by oath or affirmation administered by the panel chair.
(8) Appearance by a party at a scheduled hearing shall constitute waiver by said party of any deficiency with respect to the giving of notice of hearing. If a party who has been notified of the time, date, and place of the hearing in accordance with the procedures of this rule fails to appear at the hearing, an arbitration panel or its chair may either postpone the hearing or proceed with the hearing and determine the controversy upon the petition, reply, and other evidence produced.
(9) A party may request that the Board Clerk arrange to have the hearing recorded by a certified court reporter at that party's own expense. Upon request of the Board Clerk, the party requesting that the hearing be recorded must provide a copy of the transcript, free of charge, to the Fee Arbitration Commission. The other party shall be likewise entitled to a copy of the transcript, at that other party's own expense, by arrangements made directly with the reporter.
(10) Death or Incompetency of a Party. In the event of death or incompetency of a party, the personal representative of the deceased party or the guardian or conservator of the incompetent may be substituted.
(11) A witness or party may be summoned by subpoena to appear before a Fee Arbitration Commission panel pursuant to the procedures set forth in Rule 16.
(12) In the event there is no written agreement or engagement letter between the parties concerning fees and expenses as to the particular matter in dispute, the respondent shall bear the burden of proof of an agreement, or other basis for recovery of fees and expenses, and of the reasonableness of the fees and expenses.
(f) Arbitration Award.
(1) The decision of the arbitration panel shall be expressed in a written award accompanied by a confidential addendum expressing the specific reasons for the award, signed by the panel chair on behalf of the panel, and thereupon filed with the Board Clerk. If there is a dissent, it shall be signed separately by the dissenting panel member. If the hearing is held before a two member panel, both panel members must be in agreement regarding the disposition of a case. Absent such agreement, the matter will be rescheduled for a new hearing before a different panel. An award may also be entered on consent of the parties.
(2) The decision and award of the arbitrators shall contain a statement of the amount or nature of the award, if any, and the terms of payment, if applicable. Clerical mistakes arising from oversight or omission may be corrected at any time by the panel chair or the Board Clerk at the Fee Arbitration Commission’s initiative or on the motion of a party.
(3) The award of the arbitration panel shall be rendered within 30 days after the close of the hearing, unless otherwise extended by the Chair or Vice Chair of the Fee Arbitration Commission.
(4) A copy of the decision containing the award and the accompanying confidential addendum shall be promptly forwarded by the Board Clerk to the petitioner, and the respondent, or their respective counsel; the Chair and Vice Chair of the Fee Arbitration Commission; and the Board.
(g) Enforcement and Challenges to Award. Whenever an arbitration panel finds by its award that all or part of the fee paid by the petitioner should be refunded by the respondent, the attorney shall make the awarded refund within 30 days of receipt of the award, unless otherwise provided for in the award. If the respondent fails to make the awarded refund within the applicable timeframe, the Board Clerk shall refer the matter to Bar Counsel for action pursuant to Rule 14(b)(5). The award rendered by an arbitration panel may be enforced in accordance with the Uniform Arbitration Act, 14 M.R.S. § 5927 et seq. Section 5928 of Title 14, relating to proceedings to compel or stay arbitration is not applicable to proceedings under this rule. The award may be challenged on the limited grounds, and by the procedure, set forth in 14 M.R.S.. § 5938.
(h) Confidentiality. With the exception of the award itself, the confidential addendum as well as all petitions, replies, records, documents, files, proceedings, and hearings pertaining to arbitrations of any fee dispute under this rule and these procedures shall be confidential, and, unless otherwise ordered by the Court, shall not be open to the public, press, or any person not involved in the dispute, excepting only the staff and members of the Fee Arbitration Commission, the Board, and the Committee on Judicial Responsibility and Disability in connection with any complaint within its jurisdiction. Notwithstanding this confidentiality, any person, including but not limited to members of the Board, members of the Fee Arbitration Commission and Board staff may notify governmental officials of actual or threatened criminal conduct by any individual. Access to relevant information may also be provided to authorized agencies.
Reporter’s Notes – June 2015
Rule 7(a) is based on the Model Rules for Fee Arbitration Rule 2(A) and is consistent with former Maine Bar Rule 9(a). The committee adopted the language of former Maine Bar Rule 9(a), with the following notable changes: 1) The position of Fee Arbitration Commission Vice Chair was created, and 2) the term duration of Fee Arbitration Commission members was increased from three years to four years in order to be consistent with the terms of Grievance Commission members.
Rule 7(b) is based on the Model Rules for Fee Arbitration Rule 2(C). There is no direct analogue in the former Maine Bar Rules, and the committee substantially adopted the language of Model Rule 2(C).
Rule 7(c) is based on former Maine Bar Rule 9(d). There is no equivalent Model Rule. The revised rule’s language reflects the creation of the Board Clerk position and more specifically delineates the duties of the Board Clerk in the Fee Arbitration process.
Rule 7(d) is based on the Model Rules for Fee Arbitration Rules 4 and 5, and is consistent with former Maine Bar Rule 9(e), albeit with revisions. First, the Commission found that the “Initial Resolution Period” discussed in former Maine Bar Rule 9(e)(2) created unnecessary delay in processing fee arbitration petitions, and thus, revised rule 7(d) eliminates this 30-day period. Second, revised rule 7(d)(5), in contrast with former Maine Bar Rule 9(e)(4)(A), no longer requires that the Respondent Reply form be sent to the respondent via certified mail, return receipt requested. Third, to address the issue of respondents failing to file a Reply and then submitting an excessive number of documents at hearing, Rule 7(d)(5) now contains the provision that a panel may refuse to consider evidence offered by the attorney that would reasonably be expected to have been disclosed in the Reply. Fourth, in comparison to former Maine Bar Rule 9(e)(5)(E) which only requires an attorney to mail the Notice of Right to Arbitrate Legal Fees to the client, Rule 7(d)(6) requires an attorney to mail the notice to both the client and the person liable for the payment of the attorney’s fees if other than the client.
Rule 7(e) is based on the Model Rules for Fee Arbitration Rule 5, and is consistent with former Maine Bar Rule 9(g). After some discussion, the committee decided to continue the practice of allowing a fee arbitration proceeding to go forward with a two person panel in circumstances where one panel member is absent, but concluded that, consistent with the former Maine Bar Rule, one member of the two-person panel must be a public member. Additionally, the committee decided not to adopt the Model Rule prohibition on recording fee hearings. However, the revised rule requires that requests to schedule a court reporter to record a hearing must go through the Board Clerk.
Rule 7(f) is based on the Model Rules for Fee Arbitration Rule 6, and is consistent with former Maine Bar Rule 9(h). To increase the efficiency of issuing decisions, the revised rule allows panel chairs to sign awards on behalf of the full panel. The revised rule also grants the Board Clerk authority to correct clerical mistakes in decisions. Additionally, the revised rule extends the period in which awards must be rendered from the former Maine Bar Rule twenty day deadline to the Model Rule thirty-day deadline.
Rule 7(g) is based on the Model Rules for Fee Arbitration Rule 7, and is consistent with former Maine Bar Rule 9(i). The committee elected not to include the Model Rules’ language regarding non-binding fee arbitration.
Rule 7(h) is based on the Model Rules for Fee Arbitration Rule 8, and is consistent with former Maine Bar Rule 9(j). The revised rule more specifically delineates who may have access to confidential documents. In contrast to the Model Rule, the former Maine Bar Rule and the revised rule do not designate Awards as confidential.