Client must consent to arbitration

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An attorney cannot consent to arbitration without his client’s consent.

Judge Richard Brown wrote for the Wisconsin Court of Appeals on Aug. 18, “In retaining an attorney to prosecute or defend an action, a client may hardly be presumed to have intended to vest the attorney with authority to remove the controversy from the courts into a forum of the attorney’s own creation.”

In 2003, Robin Edler entered into a contract with D & D Carpentry, Inc., for the construction of a residence. The contract included a provision for arbitration.

In 2007, D & D sued Edler for breach of contract. Neither party invoked the arbitration provision, and a jury trial was scheduled.

Shortly before trial, the attorneys agreed to arbitration, although not with the arbitrator specified in the contract. The court ordered arbitration, and the jury trial was removed from the calendar.

Edler hired new counsel, and moved for reconsideration, claiming she did not consent to arbitration. At a hearing, Edler’s predecessor counsel admitted that Edler did not authorize him to consent to arbitration.

Nevertheless, the court ruled that Edler was bound by her counsel’s stipulation.

The Court of Appeals accepted Edler’s petition for leave to appeal, and reversed.

Citing longstanding precedent that an attorney has no authority to enter into a settlement without his client’s consent, and that an agreement to arbitrate is a “settlement tool,” the court concluded, “we are comfortable with saying that, just like settlement, no attorney has the authority to forego a jury trial in favor of arbitration without the client’s consent.”

The court also looked to the law governing settlement for guidance on the procedures to apply when a party claims he did not consent to arbitration, and held that the client bears the burden of proving that her attorney’s actions were unauthorized.

Before concluding, the court addressed two other aspects of the case it found troublesome.

First, it noted a comment by the trial court that arbitration was the best way to resolve the case, and said, “It is not the province of the trial court to order arbitration based on what it opines is the best way to resolve a case.”

Second, it noted that much of the discussion regarding arbitration occurred off the record, and discouraged this practice.

Judge Brown wrote, “Because the record was not made when it should have been, we are reduced, as was the trial court, to relying on the reconstruction of what occurred based on testimony of the attorneys and the trial court’s recollection as to their understanding of what happened. This use of court time and resources could have been avoided if there had been an on-the-record discussion.”

David Ziemer can be reached at [email protected].