April 8, 2008
An Unusual Retainer Agreement
A case from the Florida Supreme Court that declared a state statute invalid involved a retainer agreement with an interesting twist-- "[i]n the event a dispute arises...the Client and Lawyer shall not make arbitrary decisions, but shall make decisions based on all facts reasonably available. In the event any dispute cannot be resolved between Lawyer and Client, the dispute will be resolved by [a third-party arbitrator] after joint consultation with the Client and the Lawyer and [the arbitrator's] decision...will be binding on both the Lawyer and the Client."
Among other things, this provision specifically covered the decision whether or not to settle the case. When a disagreement over settlement thereafter arose, the arbitrator decided that the client should accept the offer and the lawyer took steps to effectuate the settlement agreement. The client then sued the lawyer for malpractice, which led to a jury award of no damages and costs in favor of the lawyer. The court decision deals with the issue of costs for expert witnesses.
Any thoughts out there on this retainer provision? (Mike Frisch)
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