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Don’t Take Experts From Strangers
Be leery of consultants charging
contingency fees for finding expert witnesses

By Elizabeth J. Cohen

Expert witness locator services are springing up all over. They offer to find an expert in whatever specialty is needed in a particular case. A consultant approaches a lawyer directly, with a potential plaintiff as well as a potential expert. The service agrees to pay its experts on an hourly basis but requires a contingency fee from the lawyer.

Common-law rules in most states prohibit compensating an expert witness on a contingency fee basis. What about the consultant?

Conditions Attached

Early state ethics opinions, mostly from the 1980’s, give conditional approval. Alabama Ethics Opinion 83-135 (1983) says a lawyer may enter into a contingency fee agreement with a medical-legal consultant if, among other conditions, the consultant’s activities do not constitute unauthorized practice of law, and the fees paid the expert witness are not contingent on the outcome.

Two stage opinions—South Carolina Ethics Opinion 81-11 (1981) and Tennessee Ethics Opinion 85-F-101 (1985)—even allow the client to contract directly with a medical doctor so long as testimony would not be one of the services for which the doctor receives a contingent fee.

However, Illinois Ethics Opinion 86-03 (1986) holds that a lawyer may not hire a witness-finder agency that will pay the expert a fixed fee and then take a percentage of the outcome. Nor, the committee added, may the lawyer acquiesce to the client’s doing so.

In 1987 the ABA took up the question in Formal Opinion 87-354, which looked at an arrangement whereby a medical-legal consulting firm would provide an initial report, medical consultation and assistance with depositions and at trial. It would also make available expert witnesses and take a percentage fee, but pay the expert witness a flat fee.

The ABA found several problems, perhaps the most important being that the consultant retains too much authority over which and how many experts to use. Also, the client may commit to pay the consultant part of the recovery before the lawyer even knows what the expert witnesses will say or who they will be.

The ABA opinion relies on Model Rules of Professional Conduct 3.4(b), which forbids offering an "inducement" to a witness that is "prohibited by law", and 5.4(a), which forbids sharing fees with a nonlawyer . There are also problems under 5.4(c), which requires the lawyer to exercise independent judgement on the client’s behalf, and Rule 1.5, which requires a reasonable fee.

Recently, some states have taken an even more restrictive view. New York State Ethics Opinion 698 (1998) considered a case in which a consultant approached a lawyer with a potential malpractice client. He wanted the lawyer to take the case on a contingency basis, but also wanted to charge the potential client a separate contingency fee.

The consultant, an M.D./J.D., would help the lawyer evaluate the case, find and prepare expert witnesses, and prepare for cross-examination of opposing experts. For this, he customarily charged 5 percent to 10 percent of the award.

The opinion holds that a lawyer may not take the case if he has to promise to use that consultant. That arrangement would violate the rule against paying someone to recommend the lawyer’s employment.

But the kickback wasn’t the only problem. A consultant "with this degree of control over the client" may interfere with the lawyer’s independent professional judgement, the opinion says. Furthermore, the additional percentage fee may render the lawyer’s own fee excessive.

In Florida Ethics Opinion 98-1 (1998), a lawyer was contacted by a consulting service, which offered to pay a medical expert an hourly fee to review the medical records of the lawyer’s clients.

If it was found that any physicians did not meet the acceptable standard of care, the expert would provide an affidavit to that effect. The lawyer would be charged a contingency fee.

The ethical problem, says the opinion, is that the service requires the use of its own medical consultant. In Pennsylvania Ethics Opinion 95-79 (1995), the committee says the purpose of Rule 3.4(b) is "to assure that a court and jury will hear the honest conclusions of the expert unvarnished by the temptation to share in the recovery."

The opinion adds, "It’s true the medical consultant is not to be the witness, but who is to doubt that he will carefully shop his evaluation among prospective witnesses before selecting the expert whose conclusions most closely resemble his own?"

Lawyers should be careful when the fee they charge is not all their own.

Elizabeth J. Cohen is a lawyer in the ABA Center for Professional Responsibility. Reprinted by permission of the ABA Journal. © 2000, ABA Journal is publishing monthly by the American Bar Assoc.

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