Defending A Party’s Right To Be Represented By An Out-of-State Attorney In A Massachusetts Arbitration
In these two appeals, the Massachusetts Supreme Judicial Court (“SJC”) requested amicus briefs on the question whether an out-of-state attorney not admitted to practice law in Massachusetts who represents an out-of-state party in a Massachusetts arbitration engages in the unauthorized practice of law. In both cases, the prevailing party in an arbitration in Massachusetts was represented by an attorney who was not admitted in the state. The losing party in each case sought to vacate the arbitral award on the ground, inter alia, that the winners’ attorneys were not authorized to practice law in Massachusetts.
NELF filed an amicus brief in support of the out-of-state party in each case arguing that a party’s choice of counsel in an arbitration should be upheld, even if the attorney is not admitted in Massachusetts, so long as the attorney is admitted elsewhere and is otherwise competent to undertake the representation. NELF argued that this open approach to arbitration recognizes the reality of today’s fluid multi-jurisdictional economy in which many, if not most, companies and many individuals transact business in a number of different states, and where arbitrations often occur pursuant to specific arbitration provisions that the disputing parties have agreed to in advance. Where, as was the case in these appeals, a party has made an informed choice of competent counsel, respecting that party’s freedom to retain counsel of its choice in the arbitration even when counsel is not admitted in the forum state does not offend the forum state’s interest in protecting its citizens from unscrupulous or incompetent legal representation. In its brief NELF noted that this open approach to multi-jurisdictional practice in arbitration has been adopted by the ABA in its Model Rule of Professional Conduct 5.5 (2002) and that ABA Model Rule 5.5 is currently under consideration for adoption in Massachusetts.
On March 28, 2006, the SJC issued its decision in this case. Because the adoption of Model Rule 5.5 is still under active consideration, the Court declined to decide the question on which it had sought amicus input and that NELF had briefed. Noting, however, that it did not need to reach the question in order to decide the appeal, the Court held that even if the out-of-state attorneys in these matters had been engaged in the practice of law while representing their clients in the arbitrations, it would not provide a basis for overturning the arbitrators’ decisions. With respect to an aspect of the case that had not been addressed by NELF, the SJC also held that, absent contrary language in an arbitration provision, arbitrators have the power to impose monetary sanctions for a party’s discovery violations.
In these two appeals, the Massachusetts Supreme Judicial Court (“SJC”) requested amicus briefs on the question whether an out-of-state attorney not admitted to practice law in Massachusetts who represents an out-of-state party in a Massachusetts arbitration engages in the unauthorized practice of law. In both cases, the prevailing party in an arbitration in Massachusetts was represented by an attorney who was not admitted in the state. The losing party in each case sought to vacate the arbitral award on the ground, inter alia, that the winners’ attorneys were not authorized to practice law in Massachusetts.
NELF filed an amicus brief in support of the out-of-state party in each case arguing that a party’s choice of counsel in an arbitration should be upheld, even if the attorney is not admitted in Massachusetts, so long as the attorney is admitted elsewhere and is otherwise competent to undertake the representation. NELF argued that this open approach to arbitration recognizes the reality of today’s fluid multi-jurisdictional economy in which many, if not most, companies and many individuals transact business in a number of different states, and where arbitrations often occur pursuant to specific arbitration provisions that the disputing parties have agreed to in advance. Where, as was the case in these appeals, a party has made an informed choice of competent counsel, respecting that party’s freedom to retain counsel of its choice in the arbitration even when counsel is not admitted in the forum state does not offend the forum state’s interest in protecting its citizens from unscrupulous or incompetent legal representation. In its brief NELF noted that this open approach to multi-jurisdictional practice in arbitration has been adopted by the ABA in its Model Rule of Professional Conduct 5.5 (2002) and that ABA Model Rule 5.5 is currently under consideration for adoption in Massachusetts.
On March 28, 2006, the SJC issued its decision in this case. Because the adoption of Model Rule 5.5 is still under active consideration, the Court declined to decide the question on which it had sought amicus input and that NELF had briefed. Noting, however, that it did not need to reach the question in order to decide the appeal, the Court held that even if the out-of-state attorneys in these matters had been engaged in the practice of law while representing their clients in the arbitrations, it would not provide a basis for overturning the arbitrators’ decisions. With respect to an aspect of the case that had not been addressed by NELF, the SJC also held that, absent contrary language in an arbitration provision, arbitrators have the power to impose monetary sanctions for a party’s discovery violations.
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