State Bar of Wisconsin

Court denies petition, calls for study of mandatory fee arbitration

At its March 13 hearing, the Wisconsin Supreme Court voted unanimously to deny a petition submitted by Gerald C. Sternberg to create a mandatory fee arbitration system in Wisconsin and to authorize a comprehensive study of the issue.

Chief Justice Shirley Abrahamson commended Sternberg on his initiative to bring the fee arbitration issue to the forefront for discussion. The justices also acknowledged the positive contributions made by the long-standing, voluntary fee arbitration programs run by the Wisconsin and Milwaukee bar associations.

Sternberg said that a mandatory fee arbitration system would help improve the public image of the legal system and would level the playing field for attorneys and clients involved in a fee dispute. He said that clients want to avoid the court process, if possible, and would benefit from mandatory arbitration.

State Bar President-elect Gerald Mowris told the court that the Board of Governors unanimously opposed the petition but supported the study of mandatory fee arbitration in specific cases. Mowris said that if the court determines that there is a demonstrated need, the State Bar would like to be involved in designing a workable solution.

"Sternberg's proposal permits the participants to 'go through the motions' of arbitration while having no intention of accepting the outcome," said Mowris. "The provisions permitting either party to the arbitration to decline to be bound by the arbitrator's decision coupled with the option of seeking a de novo hearing in civil court effectively defeat the purpose of the proposal. If a client is already unhappy with a bill, how much more unhappy would the client be when after taking time to participate in 'arbitration' the client finds him or herself in a civil action?" added Mowris.

D. Michael Guerin, Milwaukee Bar Association president, agreed with Mowris and said that the Milwaukee Board of Directors opposed the petition and mandatory fee arbitration. He told the court that the Milwaukee program has been in place more than 20 years and is providing a valuable service to both attorneys and the public, at a financial loss to the bar association.

Robert Swain, State Bar Resolution of Fee Disputes Committee chair, said public perception is important and that nonlawyers currently serve on the State Bar's fee arbitration panels. He said that nonlawyer participation gives clients the feeling that the panels "aren't stacked against them." Swain agreed with the court's concern that both existing programs need better promotion. Swain told the court that he strongly believes that the State Bar's current system is effective and should be preserved.

In the open conference following the hearing, Justice Patrick Crooks said that the court's decision to study mandatory fee arbitration is not a criticism of what current volunteers - lawyers and public members - are doing. Justice Jon Wilcox agreed. "Things are working, and if there is a glitch, we'll find it and fix it," he said.

Justice Diane Sykes said that she would support the study committee but did not believe the materials submitted to the court demonstrated the need to pursue the effort. Chief Justice Abrahamson replied that there is not necessarily a malfunction in the current programs, but there is a need to further study those disputes that do not make it into the system.

The justices authorized the appointment of a study committee by June 30, 2001.

• Court considers mandatory fee arbitration (SB Newsletter Feb., 2001)
• More about mandatory fee arbitration
• More about the State Bar Fee Arbitration Program