Plaintiff Lacks Proof of Paid Legal Fees in Arbitration Case
(Story by Carol Thompson) When a party loses an arbitration the arbitrator can award legal fees to the prevailing party but there’s no remedy for the plaintiff to learn if the fees are actually paid to the lawyer.
As previously reported, a resident of California had agreed to purchase a condominium at Palms Place in Las Vegas, prior to construction of the units. After delays and unanswered questions, the buyer did not want to move forward with the purchase and the matter landed before an arbitrator from the American Arbitration Association.
The plaintiff lost the case and was ordered to pay nearly $90,000 in legal fees for Palms Place to Marc P. Cook of Bailus Cook & Kelesis of Las Vegas without actual proof that Palms Place had paid the bill. The plaintiff was not shown a cancelled check or any other proof of payment to verify the entire amount was paid by Palms Place to Cook.
The American Arbitration Association does not comment on cases that are, or have been, before them. An appeal is pending in the California resident’s case.
The plaintiff was charged at the rate of $350 per hour with additional fees for copies and postage. Cook’s final bill totaled $109,725, including arbitrator fees, according to court documents filed.
Charges included $70 for an email sent by Cook to someone to request contacting someone else. A charge of $105 was billed for Cook to review and respond to the arbitrator’s email. When the arbitrator wrote and requested a conference, Cook billed $70 to read and respond to the message.
The costs do not include those of the plaintiff, including his own legal fees.
Arbitration is dubbed a cheaper alternative to court, but for some who have been through the process, it is far more costly than court. For the California resident, the cost of arbitration was more than the $100,000 deposit he put down on the condominium. Not only did he lose his deposit but raked in arbitration and legal fees bringing the out-of-pocket total to over $200,000.
Due to the high legal fees, the purchaser said he would like to see proof of the payment made by Palms Place to Cook. That may not be possible unless a judge orders disclosure when his appeal is heard.
When legal fees are awarded the party can either pay the bill, have a judgment filed against them, or appeal in a district court.
Despite a plethora of consumer complaints and lawsuits against arbitration companies, Congress has done little to change the laws or to make arbitration more consumer friendly.
Binding arbitration clauses are often found in the fine print on contracts and purchase agreements. The clause forces a consumer into arbitration as it’s a waiver of rights to try a case in court. If a consumer loses a case, the legal fees for the prevailing party can be awarded if the arbitrator so chooses. While the cost of arbitration itself can range from hundreds to thousands of dollars, the legal fees can be exorbitant and far outweigh the issue or item in dispute.