Money Talks: Exposing Bias Using Expert Witness Fee Arrangements

Article excerpt

This article originally appeared in the January 2012 Products' Liability Committee Newsletter.

Expert witnesses play a more critical role than ever in the outcome of product liability litigation. Indeed, in many jurisdictions a sustainable opinion from a qualified expert witness is required to establish plaintiffs prima facie case. Therefore, it is increasingly important to explore issues that may challenge the credibility of an opposing party's expert witnesses. An important factor in assessing credibility is bias, and a source of bias that lawyers should carefully investigate is an opponent's expert witness fee arrangement.

Some forms of expert compensation, such as contingency fees, inherently reveal a conflict-of-interest or an appearance of bias. For that reason, consider not only what an opponent's expert witness is paid, but also how the expert is paid. Uncovering an expert's financial stake in the outcome of litigation to expose bias can seriously undermine the witness's credibility.

Do your homework

Before deposing an expert witness, learn what you can about the expert's business relationships and history of serving as an expert witness. Begin with informal research on the internet, including the expert's own website, blogs, or discussion board posts. Then speak with your own expert, who is often familiar with others in the field and may be aware of existing alternative fee arrangements. Also check the expert's professional association for disciplinary proceedings against the expert or records of professional misconduct which may be available on the internet.

Your firm's librarian can research cases in which the expert has previously worked, or research tools such as Daubert Tracker can be used to determine if the expert has ever been excluded or challenged for having a financial stake in the outcome of litigation. Your client's trade association might also track the use of experts and maintain a database of useful information about an expert witness.

Some jurisdictions and the Federal Rules of Civil Procedure require pre deposition disclosures including a statement of an expert's compensation. (1) Use this statement as a starting point to build questions to ask about the expert's method of payment during the deposition.

In some cases, serving a subpoena duces tecum with the expert's deposition notice requesting all pertinent documents may be an appropriate first step in gathering expert bias evidence if the information is needed to prepare for a deposition, but has not been disclosed by the expert or hiring attorney.

Dig deep during the deposition

During the deposition, vigorously question the expert regarding the terms of his fee agreement with opposing counsel. Specifically, inquire beyond the amount of compensation and determine the particular method used to calculate the expert's fee. An expert's compensation should never be conditioned upon, or measured by, the amount of the recovery in damages in the litigation. The presumption is, and research has proven, (2) that such fees naturally compromise the integrity of the testimony of the witness. (3)

Note that contingent compensation can take many forms. The most obvious contingency fee is a percentage of the settlement or recovery from a lawsuit. But contingent fees may also consist of retrospective higher hourly rate payments for favorable outcomes, "success bonuses", fringe benefits, premiums, or any form of financial incentive or reward conditioned on the outcome of litigation. Another form is a split-fee arrangement whereby an expert agrees to accept a lower hourly rate than his normal rate, conditioned upon receiving a percentage of recovery in the event of successful resolution of the case.

Also explore fee agreements in place prior to litigation, as an expert's activity leading to testimony should not be compensated on a contingent basis. For example, experts may be retained in an advisory role prior to litigation, and then subsequently called upon to offer opinion testimony at trial. …