Arbitration Clauses in Attorney Engagement Agreements: How They Impact Legal Malpractice Claims in Texas
Legal Malpractice
A legal malpractice claim can be removed from court before its merits are heard. The reason may be several lines in the signed engagement agreement. An arbitration clause requires covered disputes to be decided by an arbitrator rather than a judge or jury. It does not defeat a claim, but it can control the forum, discovery, costs, hearing procedures, and right to appeal.
Clients should have the agreement reviewed before filing suit or responding to a motion to compel arbitration. Top-rated legal malpractice lawyers in TX can determine whether the clause covers the asserted claims, whether a valid agreement exists, and whether a contract defense may prevent enforcement.
Arbitration Can Remove the Claim From Court
Texas courts generally enforce arbitration clauses contained in attorney engagement agreements. In Royston, Rayzor, Vickery & Williams, LLP v. Lopez, the Texas Supreme Court enforced an arbitration provision between a law firm and its client. The Court held that such clauses are not automatically unconscionable and that a person who signs an agreement generally is charged with knowing its contents.
Once enforced, the clause may eliminate the client’s right to present the case to a jury. The legal malpractice claim instead proceeds before one or more private arbitrators under the procedures identified in the agreement. A legal malpractice attorney must therefore examine the clause before determining where and how to file the claim.
Arbitration Can Limit Discovery and Change How Fault Is Proven
Arbitration clauses may restrict depositions, interrogatories, document requests, subpoenas, and the time allowed to develop evidence. These limits can be significant in legal malpractice Texas cases involving extensive files, missing communications, disputed advice, or testimony from lawyers and third parties.
The claimant must still prove duty, breach, causation, and damages. When the claim requires proof that the client would have obtained a better result in the underlying matter, Texas legal malpractice lawyers must also establish the “case within a case.” Restricted discovery may make early evidence preservation and targeted document requests even more important.
Arbitration Can Increase Costs and Reduce Procedural Protections
Arbitration is not always less expensive than litigation. The parties may be required to pay filing charges, administrative expenses, hearing fees, and the arbitrator’s hourly compensation. The engagement agreement may also determine how those costs are divided.
Unlike a judge, a private arbitrator is paid by the parties. A legal malpractice attorney in Dallas should review whether the fee structure makes enforcement unfair or prevents the client from effectively pursuing the claim. Texas Professional Ethics Opinion 586 also states that lawyers should explain the significant advantages and disadvantages of arbitration provisions sufficiently to permit an informed decision.
Arbitration Can Severely Restrict an Appeal
A court judgment may be challenged for legal or factual error, but an arbitration award is subject to much narrower review. Under Texas Civil Practice and Remedies Code Section 171.088, courts may vacate an award only on limited grounds, including fraud, evident partiality, arbitrator misconduct, or the arbitrator exceeding granted authority.
A mistaken interpretation of the law may not be enough to overturn the result. Texas legal malpractice attorneys must therefore prepare the arbitration as though it may be the client’s only full opportunity to present evidence and obtain relief.
Challenge the Clause Before It Controls the Case
The wording of the engagement agreement can affect every stage of a malpractice claim. The Kassab Law Firm represents plaintiffs in claims involving attorney negligence, fiduciary breaches, arbitration provisions, and substantial financial losses. For a review of the clause, available defenses, and potential damages, contact us today.