RPC 107

April 12, 1991

Alternative Dispute Resolution

 

Opinion rules that a lawyer and her client may agree to employ alternative dispute resolution procedures to resolve disputes between themselves.

 

Inquiry #1:

 

The Private Adjudication Center is an affiliate of the Duke University School of Law, Durham, North Carolina ("P-A-C"). The P-A-C has been organized for a number of years and has developed a successful program and procedures for alternative dispute resolution.

 

Would it be unethical for a lawyer to suggest to a client that the lawyer and client agree in their employment contract to refer any future dispute arising out of their contractual relationship to the Private Adjudication Center at the Duke Law School for binding resolution under one or more of its alternative dispute resolution procedures?

 

Opinion #1:

 

No. As a matter of professionalism, lawyers should avoid litigation to collect fees wherever possible. In that regard lawyers are encouraged to employ reasonably available alternative forms of dispute resolution.

 

Inquiry #2:

 

Would it be unethical for a lawyer to require such an agreement by including in all engagement letters and employment contracts a provision such as:

 

Any dispute arising under this contract for legal services will be referred to the Private Adjudication Center and the resolution of such dispute shall be binding on the parties to this agreement;

 

PROVIDED, that no such agreement shall be construed as designed to divest the North Carolina State Bar of its authority or responsibility for disciplinary action for breaches of professional ethics, or otherwise used by the lawyer to evade the consequences of unethical conduct.

 

Opinion #2:

 

No.

 

Inquiry #3(a):

 

Would the ethics opinion be different if the agreement were nonbinding on either party?

 

Opinion #3(a):

 

No.

 

Inquiry #3(b):

 

Would the ethics opinion be different if the agreement were binding upon the lawyer but nonbinding upon the client?

 

Opinion #3(b):

 

No.

 

Inquiry #3(c):

 

Would the ethics opinion be different if the agreement provided that the nonbinding results could be used in any future litigation to the extent permitted under rules of evidence and procedure (or could not be used in any way)?

 

Opinion #3(c):

 

No.

 

Inquiry #3(d):

 

Would the ethics opinion be different if the agreement provided that binding results could be pled in bar of any future covered claims?

 

Opinion #3(d):

 

No.

 

Inquiry #3(e):

 

Would the ethics opinion be different if the agreement contained a statement that either party has a right to the advice and use of independent counsel at any state of the negotiation of the employment contract or the resolution of any dispute arising out of such employment.

 

Opinion #3(e):

 

No.

 

Inquiry #4:

 

Are agreements for the private resolution of disputes between attorneys and clients subject to any restriction or limitation if there is no predispute agreement?

 

Opinion #4:

 

Such agreements would be appropriate assuming that the nature of the alternative dispute resolution procedures is fully disclosed to the client and the client is given full opportunity to consult independent counsel relative to the wisdom of foregoing other possible remedies in favor of alternative dispute resolution.

 


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