Ruling Expressly Limited to Sophisticated Business Clients.
In Desert Outdoor Advertising v. Superior Court (Murphy), Case No. A129051 (1st Dist., Div. 1 June 17, 2011) (certified for publication), an appellate court held that a lawyer having clients signing a new retainer agreement with an arbitration clause when lawyer changed firms, even though the earlier retainer with a different firm contained no such clause, had no fiduciary duty to separately explain the clause when the clients were sophisticated business persons. Arbitration was properly compelled in a suit where clients later sued lawyer for malpractice.
The reviewing court found that clients’ failure to read the agreement or all portions of it was inexcusable, refusing to extend the form and content requirements for medical malpractice arbitration provisions because even those requisites presumed the clients read the agreements (a critical factor missing in this situation).
However, the ruling was limited to sophisticated clients, although we would surmise that the principle still might be the same for less sophisticated clients who also fail to read their attorney retention agreements.