Carey

The fee dispute underlying this litigation has been submitted (1) to advisory arbitration before a local bar association pursuant to Business and Professions Code section 6200 et seq., on appellant’s demand; (2) for trial de novo in state court, by appellant; (3) for trial de novo in federal court (but dismissed) by respondent; and (4) to binding arbitration before the American Arbitration Association (AAA) on respondent’s demand. The matter is before us on appeal from the judgment confirming the AAA award. There has been no trial de novo.

This appeal obliges us to determine whether giving effect to a clause in an attorney-client fee agreement calling for binding arbitration of fee disputes before the AAA contravenes the rights of clients established by the pertinent MFA provisions. We conclude it does and thus the arbitrator exceeded his powers by purporting to enter an award under authority of the binding arbitration clause. We reverse the judgment confirming the arbitral award. Appellant is entitled to a de novo trial.

I. Facts

In May 1995 appellant Alternative Systems, Inc. (ASI) and respondent Thomas P. Carey entered into an “Attorney-Client Fee Contract.” This…