Court Conditions Enforcement Of Arbitration Provision On Movant’s Willingness To Pay Plaintiff’s Arbitration Fees

A California appellate court has affirmed a lower court’s order that a legal malpractice defendant cannot force its former client into arbitration unless it agrees to pay all but $1000 of her arbitration fees and expenses. In Frausto v. Lawyers for Employee and Consumer Rights, APC, the lower court found that plaintiff could reasonably anticipate her share of the costs of the arbitration would exceed $23,000 an amount which “would consume
nearly an entire year’s worth of her take-home pay.” Under those circumstances, plaintiff had argued that the arbitration provision contained in the retainer agreement with her former attorneys was “substantively unconscionable.” Agreeing with plaintiff, the Court of Appeal held that “the trial court properly gave [the defendant] the choice either to pay [plaintiff’s] arbitration expenses in excess of $1,000 or to waive arbitration.”

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