Updated through July, 2001

C-235, Negotiating Settlement of Merits and Attorney Fee
JI-28, Retired Judge as Mediator
JI-69, Judge as Conciliator
RI-2, Fee Arbitration Clause in Client-Lawyer Agreement
RI-69, Settlement Decisions of Disabled Client
RI-78, Threats in Attempt to Settle
RI-132, Third Party's Limitations on Settlement
RI-134, Multiple Clients' Acceptance of Mediation Award
RI-165, Enforcing Please Bargain
RI-188, Record Retention in ADR
RI-196, Liability and Grievance Arbitration Clauses
RI-235, Former Mediator as Lawyer for Party
RI-255, Conveying ADR Offers
RI-256, Arbitrator's Duties to Unrepresented Party
RI-257, ADR of Client-Lawyer Disputes
RI-262, Advising of ADR Options
RI-263, Lawyer Operating ADR Business
RI-264, Lawyer/Advocate and Witness in ADR
RI-265, Lawyer/Mediator Serving as Arbitrator
RI-268, Duties of Disclosure in ADR
RI-271, Conflicts with ADR Participants
RI-274, Contacts with Parties
RI-275, Lawyer's Law Practice and ADR Business

The State Bar Committee on Professional and Judicial Ethics is authorized to provide written opinions on response to a request from a member of the State Bar concerning the member's own prospective conduct, or in response to a judicial officer concerning an ethics question arising in a proceeding pending before the judicial officer. The Committee is not authorized to provide opinions on past conduct or on questions of law.

Informal opinions are drafted by individual committee members and are circulated to the committee for comment before release to the inquirer; the opinions are denoted "RI" to indicate informal opinions interpreting the Michigan Rules of Professional Conduct. Formal opinions have interest or wide reaching implications for the entire bar, and are approved by the State Bar Board of Commissioners prior to release; the opinions are denoted "R" to indicate formal opinions interpreting the Michigan Rules of Professional Conduct, and "C" to indicate opinions interpreting the former Michigan Code of Professional Responsibility.

State Bar Ethics Opinions have no force and effect of law and may not be relied upon as an absolute defense to a charge of ethical misconduct.

Additional References:

Article, Orders for Fees and Sanctions, by Marcia Proctor printed in Counsel's Corner Vol 73 MBJ 1085 (Oct 1994)
"Rules of Arbitration," State Bar Standing Committee on the Arbitration of Disputes Between Attorneys:

Orders for Fees and Sanctions

Q. When a tribunal awards attorney fees or imposes sanctions, how does the award affect the calculation of the attorney's bill to the client.

A. When a court awards sanctions, a number of interpretive problems can arise if the order signed by the judge is not carefully drafted. The judge may award sanctions or attorney fees against a party or against the part's counsel, or both, and may award sanctions to a party, to the party's counsel, or both. When the judge's order is silent or ambiguous regarding whose pocket the sanctions should come from and who is entitled to the benefit of the sanctions, a lawyer may not unilaterally decide those questions.

For example, a court may award attorney fees to a plaintiff when a defendant has been properly noticed for deposition but wrongly fails to appear. If plaintiff's counsel has a fee agreement for an hourly rate, does the award of fees go directly to plaintiff's counsel in addition to the fees charged to the plaintiff, or does the award reduce the fee that must be paid by the plaintiff (i.e. the opposing party has paid attorney fees for the deposition that was not held, thus the plaintiff does not get billed for that service)? If the plaintiff's fee agreement with the plaintiff-client was a contingency fee, is the award deducted from the one-third share due the plaintiff's counsel? If the award is intended to be in addition to the contingency fee, does this additional fee violate MCR 8.121 that prohibits contingent fees in personal injury and wrongful death cases in excess of one-third the recovery? The presiding judge cannot override a court rule.

On the other hand, plaintiff's counsel could argue that his or her counsel's appearance at the deposition was unnecessary when the defendant failed to appear, or that the defendant's failure to appear made it necessary for the deposition to be rescheduled. Such circumstances were not contemplated when the MCR 8.121 limitation was crafted.

The complexities are similar for the payment of the sanctions. Is the sanction levied against the defense or both? If both are liable, what are the respective shares each should pay?

In the absence of a clear court order, a dispute may arise between counsel and client regarding who is obligated to pay the sanction and who is entitled to receive it. There is scant authority on these questions, since they most frequently arise at trial where decisions are not published. Since the questions involve interpretation of the language of the judge's order, ethics principles do not totally resolve the issue. The only option is to return to the judge for clarification of the judge's order.

When sanctions are awarded in open court, counsel should inquire from the judge how the sanctions should be paid and allocated. In drafting an order for the judge's signature, a lawyer should resolve as many of these issues as are present in the particular matter. Using the deposition sanctions described above, for instance, if the defendant was properly notified of the deposition and failed to appear, it would be appropriate to assess the award directly against the defendant. If the defendant was not properly notified to appear, or was advised by counsel not to appear, it may be appropriate to assess the award directly against defense counsel. Further, since plaintiff's counsel appeared for the deposition, it would be appropriate for the award to be paid directly to plaintiff's counsel, and the plaintiff-client would not be billed for the deposition.

"Rules of Arbitration," State Bar Standing Committee on the Arbitration of Disputes Between Attorneys:

JURISDICTIONAL STATEMENT:

"The Committee shall concern itself with resolution of differences between members of the Bar arising out of professional relationships."

SBM Rule 11, Sec 3:

"The Committee on Arbitration of Disputes Among Lawyers has the power to issue subpoenas (including subpoenas duces tecum), to take testimony under oath, and to rule on the admissibility of evidence

A. The Committee, through its members, panels, or as a committee of the whole, may conduct arbitrations of disputes among members of the State Bar of Michigan as requested by those members. The Committee also offers mediation services to State Bar members pursuant to Rule 9. The Committee may decline to arbitrate any dispute pending or impending before any tribunal. Arbitration decisions are not a substitute for, and are not binding on, disciplinary proceedings pursuant to MCR 9.100 et seq or MCR 9.200 et seq.

B. An arbitration decision rendered pursuant to these Rules is a final determination of the dispute among the parties. The decision may be reduced to judgment and may be enforced pursuant to MCL 600.5025 and MCR 3.602.

C. A party's failure to comply with these rules is grounds for contempt, and the party may be sanctioned by the arbitrator.

D. A Committee member's failure to comply with these rules is grounds for removal from the committee.

E. The arbitrator may grant any remedy or relief in law or equity that the arbitrator deems fair and just. If the parties resolve their dispute during the course of arbitration, a consent decision may be issued by the arbitrator and enforced as any other arbitration decision

A. Any member of the State Bar of Michigan may submit to arbitration and/or mediation by the Committee any dispute with another member of the State Bar of Michigan, pursuant to these Rules. All parties shall agree that the Rules of Arbitration shall govern the arbitration-mediation process.

B. All inquiries regarding the arbitration and/or mediation process shall be directed to State Bar staff, who shall provide inquirers with appropriate forms and copies of these rules.

C. By submitting the dispute to the Committee's jurisdiction, the parties agree:

1. to abide by these Rules and the award of the Committee's arbitrators;

2. to hold the State Bar, its staff, the Committee and its members absolutely immune from suit for conduct arising out of the performance of their duties under these Rules;

3. if arbitration/mediation is sought pursuant to a contractual obligation, to submit the relevant contract language to the Committee with the forms;

4. that the arbitrators and/or mediators shall not be authorized to testify or comment on the decision rendered in any arbitration, and that all arbitrators' and mediators' notes and work product, other than the issued decision, shall be exempt from disclosure or discovery in any other forum;

5. that the arbitrators/mediators shall not represent any person in any matter substantially related to the arbitration and/or mediation;

6. that judgment on the arbitration award may be entered in any court having competent jurisdiction and shall have the same force and effect, and may be enforced in the same manner, as other judgments.

D. The parties shall submit a dispute to arbitration/mediation by executing a "Request for Arbitration" on forms provided by the Committee, and returning the original and 3 copies of the forms and other required supplementary information to the Committee at the State Bar office. The Request for Arbitration/Mediation shall require, at a minimum, the identities of the parties to the dispute, their Michigan law license numbers, the nature of the dispute, and any time constraints applicable to resolution of the dispute.

A. The parties shall attach to the Request for Arbitration an Arbitrator Preference form, indicating whether a single-member arbitration or three-member arbitration is requested.

1. If the arbitration is to be conducted by a single member, the parties shall designate any committee member who all parties agree may serve as arbitrator.

2. If the arbitration is to be conducted by a three-member panel, each party shall designate a committee member and the selected arbitrators shall select a third committee member who shall serve as panel chairperson.

3. Each party shall designate those committee members whose service as arbitrator is objectionable under MCR 2.003, and shall specify the grounds for the objection.

B. Committee members shall execute an oath for service as arbitrator.

C. Upon receipt of completed Requests for Arbitration and Arbitrator Preference forms from all parties, State Bar staff shall:

1. Contact the Committee Chairperson to discuss arbitrator assignment, giving preference to the committee members designated by the parties, if any;

2. Contact the committee members proposed as arbitrators to determine availability and any disqualifying information known to the committee members;

3. Forward copies of the Arbitration Request Form to the designated arbitrators;

4. Send notices of the arbitration appointment to the parties, the Committee Chairperson, and the arbitrators.

D. When an arbitration panel is selected, the panel chairperson shall schedule hearings, conduct the pre-hearing conference, issue subpoenas, rule on motions and evidence, issue the pre-hearing order, order a default, and preside during the arbitration.

A. The arbitrator shall contact the parties to schedule a pre-hearing conference, which may be conducted by conference call initiated by the arbitrator. The purpose of the pre-hearing conference will be to discuss the availability of mediation pursuant to Rule 9 and to determine the scope of the arbitration, limit issues, obtain stipulations of issues and facts, determine witnesses and exhibits, and schedule the arbitration hearing. The arbitrator shall determine the order in which the parties shall proceed at hearing. In a panel arbitration, the panel chairperson shall perform these duties.

1. The parties shall make every effort to stipulate to issues, facts, and exhibits prior to the pre-hearing conference. Any exhibits that are not stipulated to may be offered as evidence in the course of the hearing.

2. The parties shall make every attempt to obtain testimony of named witnesses through deposition, a transcript of which shall be accepted by the arbitrator as an exhibit in lieu of direct testimony. The calling party shall pay costs of the transcripts.

B. The arbitrator may exercise the authority of the Committee to issue subpoenas (including subpoenas duces tecum), to take testimony under oath, and to rule on the admissibility of evidence. Subpoenas for relevant and material evidence and witnesses may be issued in the discretion of the arbitrator upon the request of a party or independently. In a panel arbitration, the panel chairperson shall perform these duties.

C. Within 15 days of the pre-hearing conference, and no later than 10 days before the proposed hearing date, the arbitrator shall issue a pre-hearing order setting forth the hearing date, time and location, the hearing duration expected, the issues to be considered at the hearing, the stipulated exhibits, and the witnesses. Any subpoenas granted shall be issued and forwarded to the requesting party contemporaneously with the pre-hearing order. The pre-hearing order shall be sent to the parties, the other panelists, if any, the Committee Chairperson, and to State Bar staff. In a panel arbitration, the panel chairperson shall perform these duties.

D. Prior to the date of the scheduled hearing, the parties may raise any matter not resolved by the pre-hearing order by presenting the matter in writing to the arbitrator, with a contemporaneous copy to all other parties. The arbitrator may require a response by other parties, limit the time for response, resolve the matter by amending the pre-hearing order, or hear the issue as a preliminary matter on the scheduled hearing date. In a panel arbitration, the panel chairperson shall perform these duties.

A. The arbitrator shall convene the hearing at the date, time and place indicated in the pre-hearing order, by introducing the pre-hearing order, requiring all persons present to identify themselves, and resolving any preliminary matters. In a panel arbitration, the panel chairperson shall perform these duties.

B. Parties shall present their cases in the order determined by the arbitrator. The arbitrator may intervene to clarify facts, seek additional information, expedite proceedings, or make rulings. In a panel arbitration, the panel chairperson shall perform these duties.

C. Witnesses shall give testimony under oath.

D. At the conclusion of the evidence and questioning by the arbitrator, the hearing shall be adjourned. If an arbitration panel hears the arbitration, the arbitrators will meet in executive session to attempt to reach a determination of the matter. The finding of a majority of those present and voting shall be the award of the panel. The arbitration chairperson shall designate a panel member to write the award. Dissenting positions shall not be written.

E. The arbitration award shall address each item in the pre-hearing order and set forth the arbitration award. The draft award for an arbitration panel shall be circulated within 14 days to each arbitrator for comment. Failure to respond with comments within 7 calendar days is deemed approval of the award. Any comments received shall be resolved by conference call among the panelists.

F. The arbitration award shall be in writing and signed by the arbitrators, and copies shall be forwarded to the parties, the Committee Chairperson and to State Bar staff.

A. A party who fails to appear for a pre-hearing conference or for a scheduled hearing after proper notice and without obtaining a postponement may be held in default. The arbitrator may reschedule the proceeding, conduct the proceeding with the other parties present, exclude submissions from the defaulted party, assess the costs of the proceeding, or any combination of these. If the proceeding is conducted, the arbitrator shall require the parties present to submit evidence as required for a determination of the matter. In a panel arbitration, the panel chairperson shall perform these duties.

A. Arbitration and mediation proceedings are closed except for the parties, unless the arbitrator rules other persons may be present. In a panel arbitration, the panel chairperson shall perform these duties.

B. Arbitration awards are confidential, and will be released only to the parties, to Committee members, and to State Bar staff.

C. At the conclusion of an arbitration, all information held by the arbitrators shall be returned to State Bar staff.

D. State Bar staff shall maintain records of the committee's business, including pending and closed arbitration matters. A closed arbitration file shall be maintained for one year after the date of the arbitration decision. After one year, the initial Request for Arbitration and the arbitration decision shall be retained as a confidential permanent record, and the remainder of the arbitration file may be destroyed.

A. Arbitration and/or mediation services shall be rendered at the providers' normal hourly rate unless otherwise agreed upon. An agreement for payment of compensation shall be in writing and executed by the parties and the arbitrator(s) or mediator(s) before the proceedings begin. Other arbitration/mediation work of the committee members shall be performed without the payment of compensation.

B. Costs and expenses incurred by arbitrators and/or mediators in the course of an arbitration assignment, including mileage, copying, postage, telephone, over-night accommodations, and meals, shall be reimbursed by the parties at rates afforded for State Bar reimbursement.

C. Expenses of witnesses for any party shall be borne by the party producing the witness. Other expenses of arbitration, including expenses of the arbitrators and any witness or any proof produced at the direct request of the arbitrators, shall be charged equally to the parties unless the parties agree otherwise or the arbitrator assesses the expenses or any part of them against a specified party or parties. In a panel arbitration, the panel chairperson shall perform these duties.

D. A party desiring a stenographic record of the arbitration hearing shall make arrangements directly with a stenographer and shall notify other parties and the arbitrators of the arrangements in advance of the hearing. The party or parties requesting a transcript shall pay the cost. If the transcript is deemed by the arbitrators to be the official record of the proceeding, it must be made available to the arbitrators and to the other parties, and the cost will be apportioned among the parties.

A. At any time, members of the State Bar may agree to submit a dispute to good faith mediation administered by the Committee and conducted by a single mediator. Mediators shall be selected pursuant to Rule 3. No person who serves as a mediator may act as an arbitrator in the same or substantially related matter.

B. All mediation agreements shall be reduced to writing and signed by the mediator and the parties promptly before conclusion of the proceeding.

A. Time frames stated in these rules should be treated as goals and not as affording any rights to any person for failing to meet any particular time frame.

B. Michigan Court Rules and Michigan Rules of Evidence are considered as guidelines for arbitration proceedings and are not binding.

C. Rulings of the arbitrators regarding motions, procedure, admissibility of evidence, and interpretations of these rules are final. Exparte communications are prohibited except as expressly authorized by law.

Effective July 27, 2001

Notice to Lawyers:
State Bar of Michigan ethics opinions are advisory and non-binding in nature. This index is a complete historical catalog. Some of the listed ethics opinions, though not expressly superseded in subsequent ethics opinions, may be nonetheless outmoded or no longer sound due to subsequent changes in case law, statutes, or court rules. Practitioners are urged to thoroughly research all sources to determine the current validity of any given ethics opinion.