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Client’s Claim His Attorney Pressured Him Into Changing the Retainer Agreement, Thereby Costing the Client More, Did Not Sound In Malpractice and Was Not an Arbitrable Fee Dispute

The First Department noted that an action by a client alleging he was pressured by his attorney into changing the retainer agreement from an hourly retainer to a contingency retainer (thereby costing the client more) did not sound in malpractice and was not arbitrable under part 137 of the Rules of the Chief Administrator of the Courts:

Plaintiff does not assert that defendants’ conduct caused the result of his dispute with his disability insurer to be worse than it would have been. Rather, he argues that defendants, in bad faith and without full disclosure, pressured him into changing from an hourly retainer to a contingency retainer. The only loss he alleges is the additional fees owed to counsel as a result of changing the retainer. This is fatal to his claim for malpractice … . …

The retainer agreement provided for arbitration under part 137 of the Rules of the Chief Administrator of the Courts. However, the gravamen of the contract claim is that it is invalid because of defendants’ misconduct in inducing plaintiff to sign it, or because it created a windfall for defendants. By the express terms of the rules the parties chose to govern their arbitration, claims such as this are not arbitrable since 22 NYCRR 137.1(b)(3) provides that part 137 does not apply to “claims involving substantial legal questions, including professional malpractice or misconduct” … . Cohen v Hack, 2014 NY Slip Op 04068, 1st Dept 6-5-14

 

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