NJSBA proposes model arbitration clause for retainer agreements

The New Jersey State Bar Association (NJSBA) urged clarification on arbitration clauses in retainer agreements following the state Supreme Court's opinion in Delaney v. Dickey, offering proposed model language for its consideration. The comments were submitted to the Court's Advisory Committee on Professional Ethics last week.

The language was drafted to include disclosure requirements referenced in the Court's opinion in Delaney, which was decided in December 2020. Delaney signaled a significant change in the obligation on the part of an attorney to explain to a client the benefits and disadvantages of arbitrating a prospective dispute between the attorney and client. The matter was referred to the Advisory Committee on Professional Ethics to consider proposing "further guidance on the scope of an attorney's disclosure requirements."

The NJSBA participated as amicus in the matter to urge the Supreme Court to reverse the Appellate Division decision, arguing that it expanded the Rules of Professional Conduct without going through the process of comment and review. The Court's decision was prospective, thereby providing an opportunity to consider draft language. After referral of the issue to the committee, the NJSBA submitted the following proposed language for consideration: