The Easiest Arbitration Agreement to Avoid May Be the One Between Attorney and Client
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The First and Ninth Circuits recently issued opinions concerning the validity of state laws requiring “informed consent” to, or “full disclosure” of, arbitration clauses in attorney retainer agreements. Although the First Circuit found its way around the issue, the Ninth Circuit took it squarely on, holding that such requirements, at least as set forth by Washington state law, are not preempted by the FAA.
In Bezio v. Draeger, __ F.3d __, No. 13-1910, 2013 WL 6570920 (1st Cir. Dec. 16, 2013), an investment adviser sued a law firm that had represented him in a securities enforcement action, alleging malpractice and disputing the firm’s fees. The firm moved to compel arbitration under the arbitration clause in the parties’ engagement agreement. In opposition, the adviser argued the arbitration clause was unenforceable because the Maine Rules of Professional Conduct demand “informed consent” for agreements requiring arbitration of malpractice claims.
Read original articleTags: Arbitration Clause, arbitration clauses, First Circuit, informed consent, Ninth Circuit
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