Joel R. Brandes and Carole L. Weidman
JUST WHEN WE THOUGHT it was safe to go back in the courthouse,
they did it again - rewriting, redrafting, renumbering, re-ruling. In late
1993, following the adoption of special rules for attorneys in matrimonial
matters [FN1] the "Uniform Civil Rules for the Supreme Court and the County
Court in relation to matrimonial matters" was amended by the Appellate
Division. [FN2] The rules were further amended on June 22 and Aug. 19, by
administrative orders of the Chief Administrative Judge of the Courts. [FN3]
As originally enacted, 22 NYCRR 202.16(c)(1) provided that a
signed copy of the attorney's retainer agreement with the client must
accompany the statement of net worth filed with the court. A further direction
was given to the court requiring them to examine the agreement to assure that
it conforms to Appellate Division attorney conduct and disciplinary rules.
Nine months after the rule has gone into effect, it appears
many lawyers are neglecting to file the retainers and, likewise, most courts
are not reviewing the retainer agreement unless a motion for support or
counsel fees is made. It would seem the failure is attributable, in some
measure, to a practical obstacle. The net worth statement, if filed, is filed
in the County Clerk's office, while the case file is with the IAS judge. This
makes it practically impossible to review unless the County Clerk's file is
transmitted to the IAS Judge's chambers. Moreover, absent an application for
pendente lite support or counsel fee, net worth statements are infrequently
filed with the court before trial.
Effective June 22, s(c) (1) was amended to partially solve the
problem, at least where new counsel is retained after the net worth statement
is filed. The rule now provides that "[w]here substitution of counsel occurs
after the filing of the net worth statement, a signed copy of the attorney's
retainer agreement shall be filed with the court within 10 days of its
execution."
Pendente Lite Fees
Old 22 NYCRR 202.16(g) entitled "Motions for Alimony,
Maintenance, Counsel Fees Pendente Lite and Child Support (Other Than Under
s237[c] or s238 of the Domestic Relations Law)" was renumbered in the new rule
as subdivision (k). It contained six subdivisions. Effective June 22, it was
amended to add a new subdivision 7, which is intended to encourage pendente
lite counsel fee and expert fee awards and to make appellate review of such
awards easier. It provides that "[u]pon any application for an award of
counsel fees or appraisal/accounting fees made prior to the conclusion of the
trial of the action, the court shall set forth in specific detail, in writing
on the record, the factors it considered and the reasons for its decision."
The rules are now expanded to cover additional matters. In
1993 the Appellate Divisions added a new Part 1400 to Title 22 of the Official
Compilation of Codes Rules and Regulations of the State of New York (22 NYCRR)
effective Nov. 30, 1993, titled "Procedure for Attorneys in Domestic Relations
Matters." It requires attorneys representing clients in certain matrimonial
matters to provide prospective clients with a statement of Clients Rights and
Responsibilities [FN4]; requires retainer agreements for such matters to be in
writing and prescribes their contents [FN5]; prohibits attorneys from taking
non-refundable retainer fees from such clients [FN6]; limits those
circumstances in such cases in which the attorney may obtain security to
insure payment of his or her fee [FN7]; requires the filing of a closing
statement with the clerk of the court at the conclusion of the attorney's
representation of the client, [FN8] and gives the client the right to compel
the attorney to submit to binding arbitration of fee disputes. [FN9]
On June 16, 22 NYCRR 1200.11 and 1200.10-a (Disciplinary
Rules) and 22 NYCRR 1400.1 and 1400.3 of new Part 1400 were amended to clarify
and expand those situations to which they apply. [FN10]
Before its amendment s1400.1 limited the application of the
rules by providing that
This section shall apply to all attorneys who, on or after
Nov. 30, 1993, undertake to represent a client in a claim, action or
proceeding, in either Supreme Court or Family Court, for divorce, separation,
annulment, custody, visitation, maintenance, child support, or alimony, or to
enforce or modify a judgment or order in connection with any such claims,
actions or proceedings.
As originally enacted this section applied only to attorneys
who represented clients in certain types of actions or proceedings in the
Supreme Court or Family Court. The specific limitation that the representation
of a client be in "a claim, action or proceeding, in either Supreme Court or
Family Court," coupled with the requirement of the filing of the retainer
agreement [FN11] and closing statement [FN12] with the Supreme Court appeared
to exclude representation of a client in the negotiation and execution of a
pre-nuptial agreement, "opting-out" agreement and separation agreement.
Section 1400.1 was amended effective June 16, to change the
word "section" to "Part" and to make it clear that the entire Part 1400
applies in cases that come within the ambit of the rule and expands its
coverage to representation of a client preliminary to the commencement of a
claim, action or proceeding designated in the rule and representation in any
court of appellate jurisdiction.
Mandatory Fee Arbitration
Simultaneously with the addition of Part 1400 the Presiding
Justices of the Appellate Divisions amended the Disciplinary Rules of the
Lawyers Code of Professional Responsibility, and the Chief Administrative
Judge of the Courts adopted a New Part 136 of the Rules of the Chief
Administrator, relating to mandatory [FN13] "Fee Arbitration In Matrimonial
cases."
The arbitration rules, as originally enacted, only applied in
those cases where representation commenced on or after Nov. 30, 1993, and like
Part 1400, applied only to "... attorneys who undertake to represent a client
in a claim, action or proceeding, in either Supreme Court or Family Court, for
divorce, separation, annulment, custody, visitation, maintenance, child
support, alimony, or to enforce or modify a judgment or order in connection
with any such claims, actions or proceedings."
Effective June 22, Part 136 was amended to rename it "Fee
Arbitration in Matrimonial Cases." In addition, s136.1 was amended to conform
it to the June 16 amendment to s1400.1, to change the word "section" to "Part"
to make it clear that the entire Part 136 applies in cases that come within
the ambit of the rule and to expand its coverage to representation of a client
preliminary to the commencement of a claim, action or proceeding designated in
the rule and in any court of appellate jurisdiction.
At the same time, a new s136.9 was added to make the
arbitration proceedings confidential. It provides that "[a]ll proceedings
commenced and conducted in accordance with this Part shall be confidential,
except to the extent necessary to take ancillary legal action with respect to
a fee matter." Former ss136.9 and 136.10 were renumbered 136.10 and 136.11
respectively. Subdivision 136.7(b) was also amended at the time to require the
arbitration panel to transmit a copy of its determination to the
Administrative Judge when it serves the parties with a copy of its written
determination.
Section 136.4 (b), provides that "[t]he Administrative Judge
may decline to accept or continue to arbitrate a dispute in which substantial
legal questions are raised in addition to the basic fee dispute." In an effort
to create some sort of statute of limitations for mandatory arbitration this
section was amended to add, after "dispute," the words "or with respect to
which no attorney's services have been rendered for at least two years." This
two-year limitation period is purely discretionary with the Administrative
Judge of each judicial district.
Section 136.2 originally provided that "In the event of a fee
dispute between attorney and client, the client may seek to resolve the
dispute by arbitration, which shall be binding upon both attorney and client."
It was believed by many attorneys that this rule should have been made
prospective in its application and that attorneys should not be required to
submit to arbitration with regard to fees previously earned and received. Some
have speculated that without such a limitation the rules invited certain
ill-motivated clients to request a refund after his/her case was concluded,
since it seemed the client had nothing to lose to demand arbitration of the
dispute. Rather than limit arbitration, effective Aug. 19, the section was
further amended to encourage arbitration of fees already paid and require
attorneys to arbitrate fee disputes with respect to fees already received.
Section 136.2 now provides that:
In the event of a fee dispute between attorney and client,
whether or not the attorney already received the fee in dispute, the client
may seek to resolve the dispute by arbitration, which shall be binding upon
both attorney and client. A client may request arbitration pursuant to
s136.5(e) of this Part either in response to notice from the attorney pursuant
to s136.5(a), upon consent pursuant to s136.5(d), or upon the client's own
initiative. [FN14]
As a consequence of the amendments matrimonial lawyers should
be cautioned - prepare to refund all or any part of the fees paid to you for
at least two years after you have completed the case.
The arbitration rules originally provided that disputes
involving a sum less than $2,000 shall be submitted to one attorney
arbitrator, and disputes involving a sum of $2,000 or more shall be submitted
to a panel of three arbitrators. [FN15] This threshold amount was increased to
$3,000 on Aug. 19. In addition, s136.3(b) was amended to clarify that the
30-day period to file a request for arbitration is jurisdictional, making the
failure to make the demand on a timely basis a fatal defect. It now provides:
"If the client does not file the request for arbitration within the 30-day
period, the attorney may commence an action to recover the fee and the client
shall no longer have the right to request arbitration pursuant to this Part
with respect to the fee dispute at issue."
FN1. See NYCRR Part 1400.
FN2. See Administrative Order dated Oct. 29, 1993, amending 22
NYCRR 202.16 effective Nov. 30, 1993. The rules, as amended apply only to
actions and proceedings commenced on or after Nov. 30, 1993. The pre-Nov. 30,
1993, rules continue to apply to all actions and proceedings commenced on or
before Nov. 29, 1993.
FN3. See Brandes and Weidman, "Regulation of the Conduct of
Divorce Lawyers," New York Law Journal, March 12, 1994, P.3, Col 3. Brandes
and Weidman and "The New Rules on Disclosure," NYLJ, April 26, 1994, p. 3,
col. 3.
FN4. See 22 NYCRR 1400.2.
FN5. See 22 NYCRR 1400.3.
FN6. See 22 NYCRR 1400.4.
FN7. See 22 NYCRR 1400.5.
FN8. See 22 NYCRR 1400.6.
FN9. See 22 NYCRR 1400.7.
FN10. See Brandes and Weidman, "Amendment to Rules on Divorce
Lawyers Conduct," NYLJ, Aug. 23, 1994, p.3., col.1.
FN11. 22 NYCRR 1400.3 requires that "in actions in the Supreme
Court a copy of the signed retainer agreement shall be filed with the
statement of net worth."
FN12. 22 NYCRR 1400.7.
FN13. s136.9 provides: "Refusal to participate in arbitration
All attorneys are required to participate in the arbitration process upon the
filing of the request for arbitration by a client in conformance with these
rules. An attorney who refuses to submit to the arbitration process shall be
referred to the local grievance committee of the Appellate Division for
disciplinary action."
FN14. The procedure is set forth in s136.5, which provides, in
part: Arbitration procedure.
"(a) Where the attorney and client cannot agree as to the
attorney's fee, the attorney shall inform the client in writing by certified
mail or by personal service that he or she has 30 days from receipt of the
notice in which to elect to resolve the dispute by arbitration, the result of
which is binding upon both attorney and client. The attorney must include
standard instructions developed by the chief Administrator regarding the
arbitration procedure and a copy of a request for arbitration. ***
"(b) A client also may consent to the attorney's request to
submit the dispute to arbitration. Such consent must be obtained in writing
prior to the initiation of the proceeding. The request for or consent to
arbitration shall specify that the client has received and read the standard
instructions developed by the Chief Administrator regarding the arbitration
procedure, and that the client waives his or her right to otherwise pursue the
claim and agrees to be bound by the determination of the arbitration panel.
"(c) If the client elects to submit the dispute to
arbitration, the client shall file the request for arbitration with the
Administrative Judge in the judicial district which has or would have
jurisdiction over the martial dispute, unless another is designated by the
Chief Administrator. Upon receipt of the request for arbitration, the
Administrative Judge shall serve a copy of the request upon the named attorney
and forward an 'attorney fee response' to be completed by the attorney and
returned to the Administrative Judge within 20 days. The attorney shall
include with the response a certification that a copy of the response was
served upon the client."
FN15. See s136.3 (c) and (d).
Joel R. Brandes and Carole L. Weidman have law offices in New
York City and Garden City. They co-authored, with the late Doris Jonas Freed
and Henry H. Foster, Law and the Family, New York (Lawyers' Co-Operative
Publishing Co., Rochester, N.Y.) Mr. Brandes and Ms. Weidman co-author the
annual supplements.
9/27/94 NYLJ 3, (col. 1)
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