ETHICS ISSUES RELATING TO THE USE OF EXPERT WITNESSES

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1 ETHICS ISSUES RELATING TO THE USE OF EXPERT WITNESSES SPEAKERS: Neil J Wertlieb Wertlieb Law Corp Antioch Street, Unit 802 Pacific Palisades, CA (424) Neil@WertliebLaw.com Ellen A. Pansky Pansky Markle Ham LLP 1010 Sycamore Ave. Suite 308 South Pasadena, CA Tel. (213) ext. 223 Fax (213) epansky@panskymarkle.com June 2, 2017

2 NEIL J WERTLIEB Antioch Street, Unit 802 Pacific Palisades, CA (424) Neil@WertliebLaw.com Neil J Wertlieb is an experienced transactional lawyer who provides expert witness services in litigation and arbitration matters. Mr. Wertlieb has served as an expert witness in disputes involving business transactions and corporate governance, and in cases involving attorney malpractice and attorney ethics. As principal of Wertlieb Law Corp, Mr. Wertlieb is also available as a mediator for business disputes and for board of director appointments. Mr. Wertlieb has practiced transactional law for over three decades, the past two decades as a Partner at Milbank, Tweed, Hadley & McCloy LLP where his practice focused primarily on acquisitions, securities offerings and restructurings. Mr. Wertlieb is also an Adjunct Professor at UCLA School of Law, where he teaches a transaction skills course of his own design, which includes deal-making, negotiation, contract drafting and ethics. He is also the General Editor of Ballantine & Sterling: California Corporation Laws, a 7-volume treatise on the laws governing corporations and other business entities in California. Mr. Wertlieb served as Chairman of the California State Bar s Committee on Professional Responsibility and Conduct, and is an officer of the Professional Responsibility and Conduct Committee of the Los Angeles County Bar Association. He also served as Chairman of the California State Bar s Business Law Section and its Corporations Committee. Mr. Wertlieb was recognized by California Law Business as one of the top 100 most influential lawyers in California. Mr. Wertlieb has had dozens of speaking engagements and published numerous articles, on topics such as attorney ethics, transactional skills, M&A, finance and corporate governance. He has written a series of articles for the Business Law News, the official publication of the Business Law Section of the California State Bar, on ethical issues of particular interest to transactional attorneys. Mr. Wertlieb received his law degree in 1984 from the UC Berkeley School of Law, and his undergraduate degree in Management Science from the School of Business Administration also at the University of California at Berkeley. While at UC Berkeley School of Law, he also served as a Judicial Extern for Justice Stanley Mosk on the California Supreme Court. For additional information, please visit

3 ELLEN A. PANSKY CURRICULUM VITAE Ellen A. Pansky is a founding partner of the Southern California law firm Pansky Markle Ham LLP. She specializes in the defense of attorneys and bar applicants in regulatory and licensure proceedings and represents defendants and plaintiffs in legal malpractice proceedings. She advises lawyers in legal ethics and risk management. She is a California State Bar Board of Legal Specialization certified Legal Malpractice Specialist, and frequently serves as an expert witness in legal malpractice proceedings. Ms. Pansky is a member and past president ( ) of the Association of Professional Responsibility Lawyers, APRL. In 2016, APRL presented Ellen with the prestigious Charles W. Kettlewell Legal Ethics Advisor Award. She is a longstanding member of the American Bar Association and served as a member of Editorial Board of the ABA/BNA Lawyers Manual on Professional Conduct ( ). Ms. Pansky served as a member of the ABA Standing Committee on Ethics and Professional Responsibility ( ), and previously served a two-year term as APRL s liaison to the SCEPR. She is a charter member of the ABA Center for Professional Responsibility. Ms. Pansky is a member ( ) and past section chair ( ) of the United States District Court, Central District, Standing Committee on Discipline. She is also a member of The Fellows of the American Bar Foundation. Ms. Pansky has served as a board member and as an Assistant Vice President of the Los Angeles County Bar Association, and has served on several of its committees including: Professional Responsibility and Ethics Committee (chair , and current member); Ethics 2000 Liaison Committee; Judicial Appointments Committee, Ad Hoc Committee on State Bar Admissions Regulations Reform and Ad Hoc President s Advisory Committee on Women in the Legal Profession. She also served as a member of the Los Angeles County Bar Association Senior Lawyers Division Executive Committee ( ). Ms. Pansky is a member and past president ( ) of the National Association of Women Lawyers; a prior chair of the State Bar of California Committee on Women in the Law ( ); a lifetime member and previously served on the Board of Governors of California Women Lawyers; and a lifetime member of the Women Lawyers Association of Los Angeles. Ms. Pansky is a California State Bar certified MCLE provider and has published extensively in the areas of legal malpractice and professional responsibility. She was selected as one of the Inaugural Fellows of the National Institute for Teaching Ethics and Professionalism (NIFTEP), and she was also an invited participant at Harvard University Law School s 2001 focus group on law firm ethics advisors

4 Outline of Selected Authorities I. ETHICAL ISSUES IN THE USE OF EXPERTS A. Engagement of Expert Fees ABA Model Rule 3.4, Fairness to Opposing Party and Counsel A lawyer shall not: (a) (b) unlawfully obstruct another party' s access to evidence or unlawfully alter, destroy or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do any such act; falsify evidence, counsel or assist a witness to testify falsely, or offer an inducement to a witness that is prohibited by law; Selected Comments [3] With regard to paragraph (b), it is not improper to pay a witness's expenses or to compensate an expert witness on terms permitted by law. The common law rule in most jurisdictions is that it is improper to pay an occurrence witness any fee for testifying and that it is improper to pay an expert witness a contingent fee. Case Law: Wilhelm v. Rush, 18 Cal.App.2d 366 (1937) [suggesting contingency fees may be paid to consulting expert who does not testify] Person v. Ass n of Bar of City of New York, 554 F.2d 534 (2d Cir. 1977) [experts should be unbiased and objective witnesses, not swayed by the incentive of receiving a higher payout if their testimony is successful ] B. Procuring Favorable Testimony from Expert ABA Model Rule 3.3, Candor Toward the Tribunal (a) A lawyer shall not knowingly: (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer; - 4 -

5 (2) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel; or (3) offer evidence that the lawyer knows to be false. If a lawyer, the lawyer s client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence, other than the testimony of a defendant in a criminal matter, that the lawyer reasonably believes is false. Selected Comments [2] This Rule sets forth the special duties of lawyers as officers of the court to avoid conduct that undermines the integrity of the adjudicative process. A lawyer acting as an advocate in an adjudicative proceeding has an obligation to present the client's case with persuasive force. Performance of that duty while maintaining confidences of the client, however, is qualified by the advocate's duty of candor to the tribunal. Consequently, although a lawyer in an adversary proceeding is not required to present an impartial exposition of the law or to vouch for the evidence submitted in a cause, the lawyer must not allow the tribunal to be misled by false statements of law or fact or evidence that the lawyer knows to be false. Case Law: Nix v. Whiteside, 475 U.S. 157 (1986) [ The suggestion sometimes made that a lawyer must believe his client, not judge him in no sense means a lawyer can honorably be a party to or in any way give aid to presenting known perjury. ] In re Jones, 5 Cal.3d 390 (1971) [ Under the circumstances shown disbarment would be appropriate... [Respondent] practiced a wilful [SIC] deception upon the court and upon the public... The crimes of which respondent was convicted involve moral turpitude... It is utterly reprehensible for an attorney at law to actively procure or knowingly countenance the commission of perjury... Knowingly offering as genuine and true a written instrument fraudulently antedated and fraudulently fabricated is equally reprehensible. ] C. Interaction with Adverse Experts ABA Model Rule 4.4, Respect for Rights of Third Persons - 5 -

6 (a) In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person. Selected Comments [1] Responsibility to a client requires a lawyer to subordinate the interests of others to those of the client, but that responsibility does not imply that a lawyer may disregard the rights of third persons. ABA Model Rule 3.4, Fairness to Opposing Party and Counsel (e) A lawyer shall not... in trial, allude to any matter that the lawyer does not reasonably believe is relevant or that will not be supported by admissible evidence, assert personal knowledge of facts in issue except when testifying as a witness, or state a personal opinion as to the justness of a cause, the credibility of a witness, the culpability of a civil litigant or the guilt or innocence of an accused... Case Law: Lewis v. Telephone Employees Credit Union, 87 F.3d 1537 (9th Cir. 1996) [testimony may be excluded based on ex parte contact with expert witness] Erickson v. Newmar Corp., 87 F.3d 298 (9 th Cir. 1996) [witness tampering] County of Los Angeles v. Sup.Ct. (Hernandez), 222 Cal.App.3d 647 (1990) [disqualification may be mandatory where plaintiff s counsel who employed expert previously employed (but subsequently withdrawn) by defendant was disqualified from representing plaintiff as a result of access to work product of defendant s counsel (expert s report)] Sutch v. Roxborough Mem l Hosp., 2016 BL , No EDA 2015 (PA. Sup. Ct. 2016) [intimidation of opposing party s expert warranted disqualification and monetary sanction] D. Privilege, Work Product and Confidentiality Federal Rules of Civil Procedure 26(a)(2)(A): A party must disclose to the other parties the identity of any witness it may use at trial to present evidence under [certain specified] Federal Rule of Evidence

7 Federal Rules of Civil Procedure 26(b)(4)(B): [D]rafts of any report or disclosure [are protected.] Federal Rules of Civil Procedure 26(b)(4)(D): Ordinarily, a party may not, by interrogatories or deposition, discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or to prepare for trial and who is not expected to be called as a witness at trial.... ABA Formal Opinion : The lawyer as expert consultant occupies the role of co-counsel in the matter as to the area upon which she is consulted and as such is subject to all of the Model Rules of Professional Conduct. Case Law: Wechsler v. Hunt Health System, 2003 U.S. Dist. LEXIS 2589 (S.D.N.Y. 2003) [no prohibition against having an expert work on a single version of a single electronic document (no obligation to create drafts of reports)] Shadow Traffic Network v Superior Court (1994) 24 Cal.App.4th 1067 [ As for the work-product doctrine, codified in Code of Civil Procedure section 2018, reports prepared by an expert as a consultant are protected until the expert is designated as a witness. ; privilege is lost upon designation of the expert as a witness because the decision to use the expert as a witness manifests the client's consent to disclosure of the information ; a law firm risks vicarious disqualification when it retains an expert witness who was previously interviewed (even if not retained) by the opposing party, if confidential info was shared] DeLuca v. State Fish Co., Inc. 217 Cal.App.4th 671, (2013) [once an expert is designated as a trial witness, the expert s opinions are no longer subject to the attorney-client privilege or work product protection, even if the expert was initially employed as a consultant; as a result, the testifying expert is not in possession of confidential information and can be retained by opposing counsel] In re Application of Republic of Ecuador, 280 F.R.D. 506 (N.D. Cal. 2012) [ notes, task lists, outlines, memoranda, presentations, and draft letters authored by... testifying experts... must be disclosed as they are not protected as draft reports and are not independently protected as work product. ] Tessera Inc. v. Sony, No. C EJD (HRL), 2013 U.S. Dist. Lexis (N.D. Cal. Oct. 18, 2013) [citing Rule 26(b)(4)(B), the court distinguished between draft report & the facts surrounding the preparation of the draft report, - 7 -

8 concluding that work product privilege applies only to the draft itself in recorded form, not any information related to the preparation of the report ] Shooker v. Superior Court (Winnick) 111 Cal.App.4th 923 (2003) [ The designation of a party as an expert trial witness is not in itself an implied waiver of the party s attorney-client privilege because his initial status is that of a possible expert witness. If the designation is withdrawn before the party discloses a significant part of a privileged communication..., or before it is known with reasonable certainty that the party will actually testify as an expert, the privilege is secure; if the party provides privileged documents or testifies as an expert (such as by stating his opinion in a declaration or at a deposition) the privilege is waived. ] United States v. Kovel, 296 F.2d 918 (2nd Cir. 1961) [suggesting that the presence of a consulting expert does not constitute a waiver of privilege] E. Criminal Matters ABA Criminal Justice Standards for the Defense Function, Standard 4-4.4, Relationship with Expert Witnesses: (a) (b) (c) (d) (e) An expert may be engaged to prepare an evidentiary report or testimony, or for consultation only. Defense counsel should know relevant rules governing expert witnesses, including possibly different disclosure rules governing experts who are engaged for consultation only. Defense counsel should evaluate all expert advice, opinions, or testimony independently, and not simply accept the opinion of an expert based on employer, affiliation or prominence alone. Before engaging an expert, defense counsel should investigate the expert s credentials, relevant professional experience, and reputation in the field. Defense counsel should also examine a testifying expert s background and credentials for potential impeachment issues. Before offering an expert as a witness, defense counsel should investigate the scientific acceptance of the particular theory, method, or conclusions about which the expert would testify. Defense counsel who engages an expert to provide a testimonial opinion should respect the independence of the expert and should not seek to dictate the substance of the expert s opinion on the relevant subject. Before offering an expert as a witness, defense counsel should seek to learn enough about the substantive area of the expert s expertise, including ethical rules that may be applicable in the expert s field, to enable effective preparation of the expert, as well as to cross-examine any prosecution expert on the same topic. Defense counsel should explain to the expert that the expert s role in the - 8 -

9 proceeding will be as an impartial witness called to aid the fact-finders, explain the manner in which the examination of the expert is likely to be conducted, and suggest likely impeachment questions the expert may be asked. (f) (g) Defense counsel should not pay or withhold a fee, or provide or withhold a benefit, for the purpose of influencing an expert s testimony. Defense counsel should not fix the amount of the fee contingent upon the substance of an expert s testimony or the result in the case. Nor should defense counsel promise or imply the prospect of future work for the expert based on the expert s testimony. Subject to client confidentiality interests, defense counsel should provide the expert with all information reasonably necessary to support a full and fair opinion. Defense counsel should be aware, and explain to the expert, that all communications with, and documents shared with, a testifying expert may be subject to disclosure to opposing counsel. Defense counsel should be aware of expert discovery rules and act to protect confidentiality, for example by not sharing with the expert client confidences and work product that counsel does not want disclosed. ABA Criminal Justice Standards for the Prosecution Function, Standard 3-3.5, Relationship with Expert Witnesses: (a) (b) (c) (d) (e) An expert may be engaged for consultation only, or to prepare an evidentiary report or testimony. The prosecutor should know relevant rules governing expert witnesses, including possibly different disclosure rules governing experts who are engaged for consultation only. A prosecutor should evaluate all expert advice, opinions, or testimony independently, and not simply accept the opinion of a government or other expert based on employer, affiliation or prominence alone. Before engaging an expert, the prosecutor should investigate the expert s credentials, relevant professional experience, and reputation in the field. The prosecutor should also examine a testifying expert s background and credentials for potential impeachment issues. Before offering an expert as a witness, the prosecutor should investigate the scientific acceptance of the particular theory, method, or conclusions about which the expert would testify. A prosecutor who engages an expert to provide a testimonial opinion should respect the independence of the expert and should not seek to dictate the substance of the expert s opinion on the relevant subject. Before offering an expert as a witness, the prosecutor should seek to learn enough about the substantive area of the expert s expertise, including ethical rules that may be applicable in the expert s field, to enable effective preparation of the expert, as well as effective cross-examination of any defense expert on the same topic. The prosecutor should explain to the expert that the expert s role in the - 9 -

10 proceeding will be as an impartial witness called to aid the fact-finders, explain the manner in which the examination of the expert is likely to be conducted, and suggest likely impeachment questions the expert may be asked. (f) (g) (h) The prosecutor should not pay or withhold any fee or provide or withhold a benefit for the purpose of influencing the substance of an expert s testimony. The prosecutor should not fix the amount of the fee contingent upon the expert s testimony or the result in the case. Nor should the prosecutor promise or imply the prospect of future work for the expert based on the expert s testimony. The prosecutor should provide the expert with all information reasonably necessary to support a full and fair opinion. The prosecutor should be aware, and explain to the expert, that all communications with, and documents shared with, a testifying expert may be subject to disclosure to opposing counsel. The prosecutor should be aware of expert discovery rules and act to protect confidentiality and the public interest, for example by not sharing with the expert confidences and work product that the prosecutor does not want disclosed. The prosecutor should timely disclose to the defense all evidence or information learned from an expert that tends to negate the guilt of the accused or mitigate the offense, even if the prosecutor does not intend to call the expert as a witness. U.S. Attorneys Manual, Expert Witness An expert witness qualifies as an expert by knowledge, skill, experience, training or education, and may testify in the form of an opinion or otherwise. (See Federal Rules of Evidence, Rules 702 and 703). The testimony must cover more than a mere recitation of facts. It should involve opinions on hypothetical situations, diagnoses, analyses of facts, drawing of conclusions, etc., all which involve technical thought or effort independent of mere facts. II. ETHICAL ISSUES FOR ATTORNEYS ACTING AS EXPERT WITNESS A. Attorney-Client Relationship ABA Formal Opinion : A lawyer serving as an expert witness to testify on behalf of a party who is another law firm s client, as distinct from an expert consultant, does not thereby establish a clientlawyer relationship with the party or provide a law-related service to the party within the purview of Model Rule 5.7 such as would render his services as a Testifying Expert subject to the Model Rules of Professional Conduct. However, to avoid any misunderstanding, the testifying expert should make his limited role clear at the outset. Moreover, if the lawyer has gained confidential information of the party in the course of service as a testifying expert, the lawyer may as a matter of other law have a duty to protect the party s confidential information from use or dis- closure adverse to the party

11 [A]s long as the lawyer s role is limited to service as a testifying expert and this is explained at the outset, the client of the law firm which has engaged the testifying expert s services cannot reasonably expect that the relationship thus created is one of client-lawyer. A lawyer who is employed to testify about requirements of law or standards of legal practice, for example, acts like any non-lawyer expert witness. [T]estifying expert services are not law-related services under Model Rule 5.7. ABA Formal Opinion : Lawyers occasionally consult about a client matter with another lawyer who is neither a member of the consulting lawyer s firm nor otherwise associated on the matter, and with no intention to retain the consulted lawyer. Such informal consultations do not customarily create an attorney-client relationship with the consulting lawyer s client. Nevertheless, confidential client information imparted during the consultation may bar the consulted lawyer from representing someone whose interests are adverse to the interests of the consulting lawyer s client. Case Law & Other Authorities: Televisa, S.A. de C.V. v. Univision Communications, Inc., 2009 U.S. Dist. LEXIS (C.D. Cal. 2009) [attorney expert witnesses do not have a client] Commonwealth Ins. Co. v. Stone Container Corp., 178 F.Supp.2d 938 (2001) [ when a law firm undertakes the role of testifying expert for a client, this undertaking, or engagement, does not form an attorney-client relationship and thus does not constitute a representation within the meaning of the ethical rules. ] Attorney Grievance Commission of Maryland v. Breschi, 340 Md. 590, 667 A.2d 659 (1995) [willful failure to file income tax return on time justifies disbarment, supporting the notion that a lawyer who serves as a testifying expert is nevertheless subject to rules of professional conduct that govern lawyers generally] District of Columbia Ethics Op. 337 (2007) [lawyer serving as expert witness has no lawyer-client relationship with party hiring lawyer] B. Conflicts of Interest and Disqualification ABA Model Rule 1.7, Conflict of Interest: Current Clients (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if: (1) the representation of one client will be directly adverse to another client; or

12 (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer. (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if: (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent, confirmed in writing. Selected Comments [1] Loyalty and independent judgment are essential elements in the lawyer's relationship to a client. [6] Loyalty to a current client prohibits undertaking representation directly adverse to that client without that client's informed consent. Thus, absent consent, a lawyer may not act as an advocate in one matter against a person the lawyer represents in some other matter, even when the matters are wholly unrelated. The client as to whom the representation is directly adverse is likely to feel betrayed, and the resulting damage to the client-lawyer relationship is likely to impair the lawyer's ability to represent the client effectively. [10] The lawyer's own interests should not be permitted to have an adverse effect on representation of a client.... Similarly, when a lawyer has discussions concerning possible employment with an opponent of the lawyer's client, or with a law firm representing the opponent, such discussions could materially limit the lawyer's representation of the client. ABA Model Rule 1.9, Duties to Former Clients (a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing

13 (b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client (1) whose interests are materially adverse to that person; and (2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing. (c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter: (1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or (2) reveal information relating to the representation except as these Rules would permit or require with respect to a client. Selected Comments [1] After termination of a client-lawyer relationship, a lawyer has certain continuing duties with respect to confidentiality and conflicts of interest and thus may not represent another client except in conformity with this Rule. ABA Model Rule 1.10, Imputation of Conflicts of Interest: General Rule (a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless (1) the prohibition is based on a personal interest of the disqualified lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm; or (2) the prohibition is based upon Rule 1.9(a) or (b) and arises out of the disqualified lawyer s association with a prior firm, and (i) (ii) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; written notice is promptly given to any affected former client to enable the former client to ascertain compliance with the provisions of this Rule, which shall include a description of the

14 (iii) screening procedures employed; a statement of the firm's and of the screened lawyer's compliance with these Rules; a statement that review may be available before a tribunal; and an agreement by the firm to respond promptly to any written inquiries or objections by the former client about the screening procedures; and certifications of compliance with these Rules and with the screening procedures are provided to the former client by the screened lawyer and by a partner of the firm, at reasonable intervals upon the former client's written request and upon termination of the screening procedures. Case Law: Oasis West Realty v. Goldman, 51 Cal.4th 811 (2011) [subsequent matter need not be an attorney-client engagement] W.R. Grace & Co., et al. v. Gracecare, Inc., et al., 152 F.R.D. 61 (D. Md. 1993) [lawyer patent expert for defendant disqualified because of earlier consultation with plaintiff s counsel in the same case, intending to retain the lawyer to advise on patent law as well as a possible rebuttal expert] Conforti & Eisele, Inc. v. Div. of Building Constr., 405 A.2d 487 (N.J. Super. Ct. Law Div. 1979) [nonlawyer expert disqualified as witness for plaintiff when defendant had used the expert to advise it earlier in the same litigation, reasoning that the expert may have been the agent of defendant s counsel and his testimony therefore might violate the lawyer-client privilege, that defendant s counsel was upholding its obligations to preserve client confidences, and that plaintiff s use of the expert would be fundamentally unfair ] Paul v. Rawlings Sporting Goods Co., 123 F.R.D. 271 (S.D. Ohio 1988) [plaintiff s nonlawyer expert not disqualified from testifying that the cause of injuries was defective design of defendant s baseball helmet on which the expert previously had advised defendant, rejecting the presumption of disclosed confidences under the lawyer rules and finding that defendant failed to prove any discussion about plaintiff s injury occurred between the expert and the defendant] Great Lakes Dredge & Dock Co. v. Harnischfeger Corp., 734 F. Supp. 334 (N.D. Ill. 1990) [nonlawyer expert for defendant not disqualified where he worked closely with plaintiff s expert at the same research center, rejecting use of an analogy to the predecessor Code of Professional Responsibility and refusing to apply vicarious disqualification as if the two experts were lawyers in the same law firm]

15 Brand v. 20 th Century Ins. Co./21 st Century Ins. Co., 124 Cal.App.4th 594 (2004) [expert witness barred as a result of prior legal representation of opposing party in substantially related litigation, even though representation was 12 years earlier] Stencel v. Fairchild Corp., 174 F.Supp.2d 1080 (2001) [conflict of interest where attorneys testify as witnesses do not raise the same concerns that are present when the conflicts involve prior legal representation] C. Client Trust Accounts ABA Model Rule 1.15 Safekeeping Property (a) A lawyer shall hold property of clients or third persons that is in a lawyer s possession in connection with a representation separate from the lawyer s own property. Case Law & Other Authorities: Arizona State Bar Assoc. Opinion No (2003) [lawyer serving as mediator does not represent clients and should not deposit into trust advance fees received for mediation services] * * *

16 AMERICAN BAR ASSOCIATION STANDING COMMITTEE ON ETHICS AND PROFESSIONAL RESPONSIBILITY Formal Opinion May 13, 1997 Lawyer as Expert Witness or Expert Consultant A lawyer serving as an expert witness to testify on behalf of a party who is another law firm s client, as distinct from an expert consultant, does not thereby establish a client-lawyer relationship with the party or provide a law-related service to the party within the purview of Model Rule 5.7 such as would render his services as a testifying expert subject to the Model Rules of Professional Conduct. However, to avoid any misunderstanding, the testifying expert should make his limited role clear at the outset. Moreover, if the lawyer has gained confidential information of the party in the course of service as a testifying expert, the lawyer may as a matter of other law have a duty to protect the party s confidential information from use or disclosure adverse to the party. Model Rules 1.7(b) and 1.10(a) apply to the lawyer s representation of a client adverse to a party for whom he is serving as a testifying expert. If the duty of confidentiality to the party on whose behalf the lawyer serves as a testifying expert would materially limit the responsibilities of the lawyer to one of his clients, the lawyer and any firm with which the lawyer is associated may be prohibited from concurrently representing that client. Ordinarily it would not be reasonable for the lawyer to believe in those circumstances that the representation of the client will not be adversely affected, and thus client consent would not permit the representation. Moreover, even though these requirements of the Model Rules are satisfied, other law, including the law of client-lawyer privilege and the law of agency, may prohibit the lawyer and his law firm from representing the This opinion is based on the Model Rules of Professional Conduct and, to the extent indicated, the predecessor Model Code of Professional Responsibility of the American Bar Association. The laws, court rules, regulations, codes of professional responsibility and opinions promulgated in the individual jurisdictions are controlling. AMERICAN BAR ASSOCIATION STANDING COMMITTEE ON ETHICS AND PROFESSIONAL RESPONSI- BILITY, 541 North Fairbanks Court, 14th Floor, Chicago, Illinois Telephone (312) CHAIR: Lawrence J. Fox, Philadelphia, PA Richard L. Amster, Roseland, NJ Deborah A. Coleman, Cleveland, OH Albert C. Harvey, Memphis, TN William H. Jeffress, Jr., Washington, DC Arthur W. Leibold, Jr., Washington, DC Rory K. Little, San Francisco, CA Margaret C. Love, Washington, DC M. Peter Moser, Baltimore, MD Sylvia E. Stevens, Lake Oswego, OR CENTER FOR PROFESSIONAL RESPONSIBILITY: George A. Kuhlman, Ethics Counsel; Karen L. Douglas, Assistant Ethics Counsel

17 Formal Opinion 2 client, unless the party on whose behalf the lawyer serves as a testifying expert waives its right to object. After the testifying expert relationship has concluded, the testifying expert and his law firm may be precluded from representing a client in a matter in which use of the party s confidential information would be necessary. Model Rules 1.9(a) and 1.9(c) do not apply because the party for whom the lawyer was asked to testify is not a former client. Nevertheless, the responsibilities of the lawyer under other law to maintain the confidentiality of the party s information may materially limit the representation in the subsequent matter, and it may not be reasonable for the lawyer to believe that the representation would not be adversely affected; if so, Model Rules 1.7(b) and 1.10(a) would bar the subsequent representation. Opinion The Committee has been asked whether, under the Model Rules of Professional Conduct, a lawyer who is retained to testify as an expert witness on behalf of a party who is another law firm s client may undertake a representation directly adverse to that party. Further, if the lawyer expert may not undertake the representation adverse to a party on whose behalf he is currently serving as a testifying expert, may the lawyer undertake the adverse representation after his testimony on behalf of the party has been concluded? Finally, if the lawyer in either situation is disqualified, may another lawyer with whom the lawyer is associated in a firm nevertheless undertake the representation? The answers to these and related questions discussed in this Opinion depend in part upon whether the lawyer expert either has a client-lawyer relationship with the party or is engaged in providing the party with a law-related service within the purview of Model Rule 5.7. In either case, the lawyer expert would in that capacity be subject to the Model Rules, including Rule 1.7 ( Conflict of Interest: General Rule ) and Rule 1.9 ( Conflict of Interest: Former Client ), and the conflict of interest of the lawyer expert would be imputed under Rule 1.10 to all lawyers associated with him in a firm. Based on the analysis and assumptions in Part I of this Opinion, the Committee concludes that under the Model Rules a lawyer serving solely as a testifying expert witness on behalf of another law firm s client, as distinct from a consultant providing expert legal advice to the firm and its client, does not thereby occupy a client-lawyer relationship with the party for whom he may be called to testify, and is not thereby providing law-related services. The lawyer nevertheless should take reasonable precautions to avoid confusion in the minds of the retain-

18 3 Committee on Ethics and Professional Responsibility ing law firm and its client as to the different duties applicable to service as a testifying expert. Moreover, the lawyer expert witness has duties under other law, such as a duty to protect the confidences of the party for whom the lawyer may testify, that may limit the lawyer and his law firm in the representation of a client in a matter adverse to the party for whom he serves or previously has served as a testifying expert. 1 These limitations on the lawyer testifying expert are analyzed in Part II of this Opinion. I. A Lawyer Serving Solely as a Testifying Expert as Distinct from an Expert Consultant Does Not Thereby Occupy a Lawyer-Client Relationship or Provide a Law-related Service. A lawyer who is expert on a legal subject may be engaged to serve one of two distinct roles: as an expert witness who is expected to testify at a trial or a hearing as a testifying expert, or as a nontestifying expert consultant. In this Part I, the Committee (a) analyzes the role of the lawyer testifying expert as distinguished from the role of the lawyer expert consultant in respect of whether the testifying expert forms a client-lawyer relationship; (b) cautions as to the lawyer s duty to clarify his responsibilities in either role, especially in circumstances where the roles become blurred; and (c) examines whether the role of testifying expert falls within the purview of Model Rule 5.7. (a) A lawyer employed as a testifying expert does not form thereby a client-lawyer relationship. The Model Rules note that [w]hether a client-lawyer relationship exists for any specific purpose can depend on the circumstances and may be a question of fact. MODEL RULES OF PROFESSIONAL CONDUCT, Scope [15] (1995). Thus, the question whether a testifying expert and the party for whom he is expected to testify have formed a relationship sufficient to invoke the ethical obligations of the Model Rules is generally a question of fact determined by principles beyond those set forth in the Model Rules. The Committee previously has stated that, as a general matter, a client-lawyer relationship can come into being as a result of reasonable expectations [of the client] and a failure of the lawyer to dispel these expectations. ABA Formal Opinion at 8; see also ABA/BNA LAWYERS MANUAL ON PROFESSIONAL CONDUCT 31: (1989). 1. The Committee neither makes factual findings nor decides purely legal questions. The Committee nevertheless may assume factual and legal conclusions in order to render an opinion as to ethical responsibilities under the Model Rules, and here does so.

19 Formal Opinion 4 Clients reasonably expect that lawyers whom they consult to perform legal services for them are bound by certain basic professional obligations, including duties of confidentiality and loyalty, and avoidance of conflict of interest. The Committee believes, however, as long as the lawyer s role is limited to service as a testifying expert and this is explained at the outset, the client of the law firm which has engaged the testifying expert s services cannot reasonably expect that the relationship thus created is one of client-lawyer. A lawyer who is employed to testify about requirements of law or standards of legal practice, for example, acts like any non-lawyer expert witness. The testifying expert provides evidence that lies within his special knowledge by reason of training and experience and has a duty to provide the court, on behalf of the other law firm and its client, truthful and accurate information. To be sure, the testifying expert may review selected discovery materials, suggest factual support for his expected testimony and exchange with the law firm legal authority applicable to his testimony. The testifying expert also may help the law firm to define potential areas for further inquiry, and he is expected to present his testimony in the most favorable way to support the law firm s side of the case. He nevertheless is presented as objective and must provide opinions adverse to the party for whom he expects to testify if frankness so dictates. A duty to advance a client s objectives diligently through all lawful measures, which is inherent in a client-lawyer relationship, is inconsistent with the duty of a testifying expert. Moreover, if an expert may testify at trial and his name has been provided to opposing counsel pursuant to applicable procedural rules, he may be deposed by the opposing party. Communications between the expert and the retaining law firm or its client employed by the expert in preparing his testimony ordinarily are discoverable See, e.g., Fed. R. Civ. Proc. 26(a)(2) and 26(b), which permit broad discovery of testifying experts, but sharply limit discovery of consulting experts retained to advise in the litigation. Some courts require production of all oral and written communications by counsel with a testifying witness even though ordinarily protected as opinion work product. E.g., Intermedics, Inc. v. Ventritex, Inc., 139 F.R.D. 384 (N.D. Cal. 1991). Other courts continue to employ a case-by-case analysis and, absent compelling circumstances, deny discovery of lawyers opinions and mental impressions communicated to testifying experts notwithstanding the 1993 changes to FRCP 26. E.g., Haworth, Inc. v. Herman Miller, Inc., 162 F.R.D. 289 (W.D. Mich. 1995), following Bogosian v. Gulf Oil Corp., 738 F.2d 587, 593 (3d Cir. 1993). See also 8 Charles A. Wright, Arthur R. Miller & Richard L. Marcus, FEDERAL PRACTICE & PROCEDURE: Civil 2d (1994) 2031 at 439, noting that Bogosian probably was overruled by the 1993 amendments. See also RESTATEMENT (THIRD) OF LAW GOVERNING LAWYERS 141(Proposed Final Draft No. 1 March 29, 1996) (adopting the Bogosian

20 5 Committee on Ethics and Professional Responsibility State bar ethics committees have rendered opinions on related issues that support the conclusion that a lawyer serving as a testifying expert does not thereby occupy a client-lawyer relationship with the party for whom he is engaged to testify. The Virginia State Bar, Standing Committee on Legal Ethics, Opinion 1884 (1989) was asked whether a lawyer had a conflict of interest if the lawyer executed affidavits as an expert for both the plaintiffs and the defendants in the same litigation, but on different issues. Noting that the issue, whether the expert had a client-lawyer relationship, involved a factual determination and is beyond the purview of the committee, the committee added: Should the attorney s capacity have been purely that of an expert witness, the Code of Professional Responsibility should be inapplicable in that situation as it does not in any way preclude an individual from serving as an expert witness for both parties to an action. 3 In contrast, protection of client confidences, in-depth strategic and tactical involvement in shaping the issues, assistance in developing facts that are favorable, and zealous partisan advocacy are characteristic of an expert consultant, who ordinarily is not expected to testify. That role at least implicitly promises the client all the traditional protections under the Model Rules, including those governing counseling and advocacy, confidentiality of information and loyalty to the client. In short, a legal consultant acts like a lawyer representing the client, rather than as a witness. Unlike the testifying expert, the expert consultant need not be identified, approach). Assuming, however, that questions are not asked at the deposition or trial about all such communications, the lawyer expert as an agent has duties of confidentiality to the principal under other law apart from duties under specific Model Rules. See RESTATEMENT (SECOND) OF AGENCY 387 (agent s use of principal s confidences for the agent s or another s benefit is improper absent principal s consent), and 395 (agent must not use or communicate principal s confidential information whether or not related to the transaction unless generally known or otherwise agreed) (1958); and see also id. 396 (agent s duties continue following termination of the agency). 3. Other state bar ethics opinions also have found that a client-lawyer relationship does not arise between a testifying expert and the party for which the lawyer is engaged to testify. See, e.g., State Bar of S.D., Ethics Comm. Opinion (1992) (lawyer serving as testifying expert for insurance company A defending a bad faith claim brought by insurance company B may represent an insured of insurance company B in an unrelated claim against a third party, in part because insurance company A is not the testifying expert s client); Phila. (Pa.) Bar Ass n, Professional Guidance Comm. Opinion (1988) (permissible [under the Pennsylvania Rules of Professional Conduct] for a lawyer to serve as a testifying expert for a party while at the same time serving as a testifying expert for the party s opponent in another unrelated suit).

21 Formal Opinion 6 and her legal advice and communications with the client and trial counsel are not expected to be disclosed, absent client consent after consultation. In sum, the lawyer as expert consultant occupies the role of co-counsel in the matter as to the area upon which she is consulted and as such is subject to all of the Model Rules of Professional Conduct. (b) The lawyer should assure his role as testifying expert is made clear and obtain client consent should his role change to consulting expert. In order to avoid any misunderstanding that no client-lawyer relationship is created, the testifying expert should make his role clear at the outset of the engagement. A written engagement letter accepted by both the engaging law firm and its client is much to be preferred. The engagement letter should define the relationship, including its scope and limitations, and should outline the responsibilities of the testifying expert, especially regarding the disclosure of client confidences. It is the responsibility of the firm that has engaged the testifying expert to assure that its client is fully informed as to the nature of the testifying expert s role. See Model Rule 1.4. The distinction between the role of the testifying expert and the role of the expert consultant can, of course, become blurred in actual practice. The testifying expert may sometimes become involved in discussion of tactical or strategic issues of the case, or become privy to confidential information pertaining to the case. When this blending of roles occurs, the lawyer whose principal role is to testify as an expert nevertheless may become an expert consultant and as such, bound by all of the Model Rules as co-counsel to the law firm s client. The lawyer expert then must exercise special care to assure that the law firm and the client are fully informed and expressly consent to the lawyer continuing to serve as a testifying expert, reminding them that his testifying may require the disclosure of confidences and may adversely affect the lawyer s expert testimony by undermining its objectivity. 4 The lawyer also is bound by the Model Rules relating to conflicts of interest and imputed disqualification with respect to service as expert consultant. See infra nn. 10, 11 and See Model Rule 1.2(c) stating: A lawyer may limit the objectives of the representation if the client consents after consultation. Obtaining client consent after consultation, see MODEL RULES OF PROFESSIONAL CONDUCT, Terminology (1995), is in this instance the joint responsibility of the law firm and the expert. See also Model Rules 1.4 and 1.5(e). Disclosure of all materials furnished to the expert by trial counsel, including opinion work product, may be ordered by courts following Intermedics, supra n. 2, when the testifying expert also serves as expert consultant. See, e.g., Furniture World, Inc. v. D.A.V. Thrifty Stores, Inc., 168 F.R.D. 61 (D. N.M. 1996).

22 7 Committee on Ethics and Professional Responsibility (c) The testifying expert does not provide a law-related service. A question remains under the Model Rules whether a lawyer who serves solely as a testifying expert provides law-related services as contemplated by Model Rule If so, the lawyer testifying expert would be subject to all the Model Rules unless the provision of the services satisfies the requirements of subparagraphs (a)(1) or (a)(2) of Rule 5.7, even though he has no client-lawyer relationship with the party on whose behalf he is to testify. In answering the question, the Committee finds significant but not dispositive that Model Rule 5.7 is intended to address potential conflicts that arise when lawyers engage in businesses ancillary to their law practices, and that nowhere in the extensive literature surrounding adoption of Model Rule 5.7 is it suggested that a problem exists when lawyers serve as testifying experts. 6 Of greater significance is that the way in which tes- 5. Model Rule 5.7 ( Responsibilities Regarding Law-related Services ) states: (a) A lawyer shall be subject to the Rules of Professional Conduct with respect to the provision of law-related services, as defined in paragraph (b), if the law-related services are provided: (1) by the lawyer in circumstances that are not distinct from the lawyer s provision of legal services to clients; or (2) by a separate entity controlled by the lawyer individually or with others if the lawyer fails to take reasonable measures to assure that a person obtaining the law-related services knows that the services of the separate entity are not legal services and that the protections of the client-lawyer relationship do not exist. (b) The term law-related services denotes services that might reasonably be performed in conjunction with and in substance are related to the provision of legal services, and that are not prohibited as unauthorized practice of law when provided by a nonlawyer. Model Rule 5.7 has been adopted in the Virgin Islands. Pennsylvania has adopted a similar rule that is based on the same rationale. At this date, no other jurisdiction has a rule dealing expressly with ancillary or law-related services. 6. Adoption of Rule 5.7 followed directly from the Stanley Commission s recommendation that [t]he Bar should study the issue of the participation of law firms and individual lawyers in business activities, certainly where either actual or potential conflicts of interest may be involved. Report of ABA Commission on Professionalism,... In the Spirit of Public Service: A Blueprint for the Rekindling of Lawyer Professionalism, 112 F.R.D. 243, (1986). One of three areas of concern prompting this recommendation was that some firms now operate businesses which may provide services that those firms believe are ancillary to the practice of law real estate development or investment banking, for example. Other firms or individual lawyers have become active in businesses which have little or nothing to do with their practice. Id. at 280. The reports, published debates and articles surrounding the adoption of Model Rule 5.7

23 Formal Opinion 8 tifying experts provide their services eliminates as a practical matter the need for the protection that Model Rule 5.7 was designed to afford recipients of law-related services in order to avoid any misperception by the recipient of the services that the protections normally part of the clientlawyer relationship apply. See Rule 5.7 Comment [1]. As noted in Part I.(b), the testifying expert should appropriately define his role at the outset of the engagement so that the law firm s client will not be confused that the Rules of Professional Conduct apply in the relationship with the testifying expert. While some members of the Committee believe that the plain language of Rule 5.7 encompasses testifying expert services rendered in circumstances... not distinct from the lawyer s provision of legal service to client, Model Rule 5.7(a)(1), the clear majority believes that the words do not apply. In the view of the majority, lawyers serving as testifying experts do not offer their services in conjunction with the legal services they offer to their clients, Model Rule 5.7(b). Rarely does a testifying expert provide services directly to a client. The client invariably is represented by its own trial counsel, who manages the role to be played by the testifying expert in discovery, preparation and trial. Accordingly, the majority concludes that testifying expert services and trial counsel services always remain distinct with regard to a particular matter. Rule 5.7, adopted in only one jurisdiction, should not be construed to reach beyond the intent of its drafters. For these reasons, the Committee concludes that testifying expert services are not law-related services under Model Rule 5.7. Thus, the testifying expert s role as a witness excludes not only a client-lawyer relationship with the party on whose behalf he is to be called, but also a law-related service provider relationship that would require all of the Model Rules and its predecessor also make it clear that the perceived problems related solely to lawyers being involved in businesses ancillary to their law practices and not at all to lawyers testifying as experts. See, e.g., ABA Section of Litigation, Recommendation and Report on Law Firms Ancillary Business Activities (1990) (recommending that the ABA adopt a rule prohibiting ancillary businesses, summarized at 6 ABA/BNA LAWYERS MANUAL ON PROFESSIONAL CONDUCT 82); ABA Special Coordinating Committee on Professionalism, Special Report to the House of Delegates on Ancillary Business Activities of Lawyers and Law Firms (1990) (recommending that the ABA adopt a rule allowing, but regulating, ancillary businesses, summarized at 6 ABA/BNA LAWYERS MANUAL ON PROFESSIONAL CONDUCT 429); Dennis J. Block, Irwin H. Warren, & George F. Meierhofer, Jr., Model Rule of Professional Conduct 5.7: Its Origin and Interpretation, 5 GEO. J. LEGAL ETHICS 739 (1992) (defending the ABA s first version of Model Rule 5.7, adopted in 1991 and rescinded in 1992, that made ancillary businesses unethical). Other authorities are gathered in ABA/BNA LAWYERS MANUAL ON PROFESSIONAL CONDUCT at 91:410-91:413 (1994). Predecessor Model Rule 5.7 was adopted by the ABA House of Delegates in 1991 and rescinded in 1992.

24 9 Committee on Ethics and Professional Responsibility to apply to his relationship. 7 II. The Lawyer Testifying Expert Has Responsibilities to Others That Under the Model Rules May Limit Representation of Clients by the Lawyer or His Firm. In this Part II, the Committee answers the questions posed at the beginning of this Opinion by analyzing the limitations that the Model Rules impose upon the lawyer and his firm as a result of his serving as a testifying expert when the lawyer is called upon (a) to represent a client concurrently in a matter adverse to the party for whom the lawyer currently is serving as a testifying expert, or (b) to represent a client after the conclusion of the testifying expert service. 8 (a) Rule 1.7(b) may bar concurrent representation of a client adverse to the party for whom the lawyer is serving as a testifying expert. The Committee assumes for purposes of this Opinion that the testifying expert owes a duty of confidentiality as well as other duties to the party on whose behalf he is engaged to testify. 9 Accordingly, if the testifying 7. The lawyer who serves as a testifying expert is, however, subject to the Model Rules that govern lawyers generally, particularly Rule 8.4 ( Misconduct ). See, e.g., Attorney Grievance Commission of Maryland v. Breschi, 340 Md. 590, 667 A.2d 659 (1995) (willful failure to file income tax return on time justifies disbarment). Thus, for example, were the expert witness to testify falsely, discipline under Model Rule 8.4 would be warranted. See also ABA Formal Opinion 336 (1974). 8. A lawyer who is called upon to serve as a testifying expert in litigation in which information relating to the representation of a former client may be relevant is barred by Rule 1.9(c), infra n. 14, from using or revealing information relating to the earlier client representation in the earlier matter that is not generally known, except as permitted under Rules 1.6 or 3.3. See also Rule 1.8(b). If the former client is the opposing party, the testifying expert is subject, not only to a disciplinary charge, but also to disqualification as an expert witness in the case. See, e.g., W.R. Grace & Co., et al. v. Gracecare, Inc., et al., 152 F.R.D. 61 (D. Md. 1993) (lawyer patent expert for defendant disqualified because of earlier consultation with plaintiff s counsel in the same case, intending to retain the lawyer to advise on patent law as well as a possible rebuttal expert). Compare cases cited infra n. 9 involving efforts to disqualify non-lawyer experts. 9. The Committee believes that most courts would find that the lawyer testifying expert is a subagent of the party on whose behalf he is engaged to testify. See supra n. 2. Courts, in cases seeking to disqualify expert witnesses from testifying for an opponent, have either held or assumed that a nonlawyer testifying expert (or a nonlawyer expert consultant) occupies a confidential relationship to the party on whose behalf the expert originally was engaged that is limited to the matters on which he was engaged as an expert. See, e.g., Conforti & Eisele, Inc. v. Div. of Building Constr., 405 A.2d 487 (N.J. Super. Ct. Law Div. 1979) (nonlawyer expert disqualified as witness for plaintiff when defendant had used the expert to advise it earlier in the same litigation, reasoning that the expert may have been the agent of defendant s counsel and his testi-

25 Formal Opinion 10 expert s concurrent representation of a client in a matter adverse to the party for whom the expert is to testify might be materially limited by his responsibilities as a subagent to maintain the party s confidences or by other duties he owes the party, Model Rule 1.7(b) 10 applies to that concurrent representation. At least in circumstances where the party s material confidential information clearly would be useful in the representation of the client, the Committee is of the opinion that the testifying lawyer could not reasonably believe that the representation of a client would not be adversely affected and, therefore, client consent is no cure. Similarly, where the testifying expert might be called upon to testify for the party and could be subject to cross-examination by a lawyer from the expert s own law firm, on behalf of a client of the firm, the representation of a client would be barred both by Model Rule 1.7(b) and by Model Rule 3.7(b). 11 Under Model Rule 1.10(a), 12 the testifying lawyer s disqualificamony therefore might violate the lawyer-client privilege, that defendant s counsel was upholding its obligations to preserve client confidences under DR of the predecessor Code of Professional Responsibility, and that plaintiff s use of the expert would be fundamentally unfair ); Paul v. Rawlings Sporting Goods Co., 123 F.R.D. 271 (S.D. Ohio 1988) (plaintiff s nonlawyer expert not disqualified from testifying that the cause of injuries was defective design of defendant s baseball helmet on which the expert previously had advised defendant, rejecting the presumption of disclosed confidences under the lawyer rules and finding that defendant failed to prove any discussion about plaintiff s injury occurred between the expert and the defendant); Great Lakes Dredge & Dock Co. v. Harnischfeger Corp., 734 F. Supp. 334 (N.D. Ill. 1990) (nonlawyer expert for defendant not disqualified where he worked closely with plaintiff s expert at the same research center, rejecting as in the Paul case use of an analogy to the predecessor Code of Professional Responsibility and refusing to apply vicarious disqualification as if the two experts were lawyers in the same law firm). 10. Model Rule 1.7(b) states: (b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer s responsibilities to another client or to a third person, or by the lawyer s own interest, unless: (1) the lawyer reasonably believes the representation will not be adversely affected; and (2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved. 11. Rule 3.7(b) states: (b) A lawyer may act as advocate in a trial in which another lawyer in the lawyer s firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9. See also State Bar of Mich., Comm. on Professional and Judicial Ethics Opinion RI-21 (1989) (firm barred from representing defendant when newly arrived of counsel to the firm previously had provided an expert opinion on plaintiff s behalf and would be called as a witness in the litigation). 12. Model Rule 1.10(a) states:

26 11 Committee on Ethics and Professional Responsibility tion would be imputed to his law firm. If the lawyer reasonably concludes that despite the possibility of a material limitation, the representation of a client will not be adversely affected by his duties as a testifying expert, the consent of the client after consultation is nonetheless required. This may be true, for example, if the matter in which the lawyer will testify and the matter in which a client seeks representation are entirely unrelated, and no material confidential information that the testifying lawyer has learned from the party has relevance to the second matter. (b) Rule 1.7(b) also may bar subsequent representation if materially limited as a result of the earlier relationship. If the party for whom a lawyer in the firm had acted as a testifying expert later sued a client of the expert s law firm on an unrelated matter, neither the testifying expert nor his law firm ordinarily would be barred from representing the defendant client. Model Rule 1.9(a) 13 would not apply, not only because the matters are unrelated, but also because a client-lawyer relationship did not exist when the lawyer acted as a testifying expert for the party in the earlier litigation, and Model Rule 5.7 did not apply to the testifying expert services. Even if the matter for the client is the same as or substantially related to the earlier litigation in which the lawyer had served as a testifying expert, neither Rule 1.9(a) nor Rule 1.9(c) 14 would apply because the testifying expert service did not involve a client-lawyer relationship or a law-related service. Although neither Rule 1.9(a) nor Rule 1.9(c) applies, the expert and lawyers associated in his firm nevertheless may have duties of confidentiality under other law that might materially limit the representation of the current client, even in a matter which is unrelated to the earlier engage- (a) When lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7, 1.8(c), 1.9 or Model Rule 1.9(a) states: (a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which the person s interests are materially adverse to the interests of the former client unless the former client consents after consultation. 14. Model Rule 1.9(c) states: (c) A lawyer who has formerly represented a client in a matter shall not thereafter: (1) use information relating to the representation to the disadvantage of the former client except as Rule 1.6 or Rule 3.3 would permit or require with respect to a client, or when the information has become generally known; or (2) reveal information relating to the representation except as Rule 1.6 or Rule 3.3 would permit or require with respect to a client.

27 Formal Opinion 12 ment. 15 For example, if the representation of the current client were to require the use of confidential financial information learned in his testifying role, the lawyer and his firm would be barred from undertaking the current client representation by Rule 1.7(b) and Rule 1.10(a) unless they reasonably believe the representation will not be adversely affected by the lawyer s duty of confidentiality owed the party for whom the lawyer earlier had served as a testifying expert and the current client consents after consultation. Summary A lawyer who serves as a testifying expert on behalf of a party represented by another law firm does not thereby occupy a client-lawyer relationship or perform a law-related service within the purview of Model Rule 5.7. He nevertheless should make the nature and scope of the relationship clear at the outset. If the lawyer s role is or later becomes that of an expert consultant for the party as described in this Opinion, a client-lawyer relationship with the party is established, and the lawyer is subject to all of the Model Rules in connection with that engagement. Even though service solely as a testifying expert is not as such governed by the Model Rules, concurrent representation of a client adverse to the party for whom the lawyer serves as a testifying expert ordinarily is barred by Model Rule 1.7(b) as a result of constraints imposed by other law. Subsequent representation may, for the same reason, also be barred where the party s confidential information is relevant to the subsequent representation or where other factors make it unreasonable to conclude that the representation will not be adversely affected. 15. The testifying expert s duties of confidentiality continue after the relationship with the party terminates. See supra nn. 2 and 12.

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29 COMPETING CONSIDERATIONS IN MAINTAINING CLIENT CONFIDENTIALITY AS COUNSEL AND IN SERVING AS A TESTIFYING WITNESS Ellen A. Pansky, Esq. Pansky Markle Ham LLP epansky@panskymarkle.com Obviously, when serving in an attorney-client relationship, a lawyer is duty-bound to maintain strict confidentiality and to refrain from revealing privileged communications with the client. When a lawyer serves as a consulting expert, it is universally accepted that the consultant s communications with counsel for the party on whose behalf the consultant was hired, are also absolutely privileged. On the other hand, when a lawyer serves as a testifying expert, none of the information and communications conveyed to the testifying expert is confidential, and all facts communicated to the expert are discoverable by the opposing party. An interesting case out of the California appellate court explored the parameters of a testifying expert s efforts to maintain confidentiality of a former client s confidential information learned during a representational relationship, while subsequently serving as a testifying expert for the former s client s litigation adversary, in a subsequent unrelated civil action In American Airlines v. Sheppard, Mullin, Richter & Hampton (2002) 96 Cal.App.4 th 1017, Sheppard Mullin partner, Long, had previously represented American Airlines in a state court proceeding against an aircraft manufacturer, MDC. After that case had ended through a confidential settlement, another purchaser of the same model of aircraft, ADO, sued MDC. In that litigation, ADO sought documents related to AA s case against MDC in its discovery. AA then asked Long to review copies of the discovery requests in the ADO v. MDC action, and Long also provided advice to AA regarding the document production, in cooperation with ADO s counsel. Thereafter, ADO indicated it wished to retain Long as a testifying expert witness in its litigation against MDC. Long advised AA, and prepared and sent a conflict of interest waiver letter to AA. AA declined to execute the waiver, citing a fear that it might need Long s services in the future if subpoenaed by ADO. Notwithstanding AA s refusal to sign a consent agreement, Long concluded that no conflict was present, and he accepted the engagement to serve as ADO s expert witness, after consulting with the ethics committee of Shepard Mullin. AA then sued Sheppard Mullin and Long, alleging breach of fiduciary duty to AA on the basis that Long s acceptance of the expert witness engagement raised the specter that Long would be called upon to reveal American Airlines confidential information relating to its allegations against MDC. Long was disqualified as an expert witness and the court of appeal also upheld the jury verdict of monetary damages based on the breach of fiduciary duty. Sheppard Mullin argued that Long had not accepted representation of a client whose interests were adverse to AA; that Long would preserve all of AA s confidences and would

30 refuse to answer any questions which would require the revelation of any of AA s confidential information; and that an expert opinion is not based upon confidential information, and therefore, all of the facts relied upon by Long as the bases of his opinions would have to be revealed, so that none of AA s confidential information could possibly serve as the foundation of Long s opinions. Additionally, Sheppard Mullin argued that the subject matter of the prior representation of AA was factually distinct, because the engine in the aircraft in the AA litigation was manufactured by a different manufacturer than the engine involved in the case in which Long had been designated a witness on behalf of ADO. Because the engines were made by different manufacturers, Sheppard argued that there was no substantial relationship between the two cases. The appellate court made short shrift of this argument, at fn. 12: Defendants argue that Long s representation of American involved MD-11 s with General Electric (GE) engines while ADO s MD- 11 s had Pratt & Whitney engines, and therefore the subject matter of the representations was not substantially related. That is hardly a distinction of consequence in the context of ADO s discovery proceedings. ADO was interested in obtaining all the information from American that it could regarding American s knowledge of problems with its MD-11. Long represented American in curtailing that very discovery. Meanwhile, MDC had full knowledge that ADO was seeking to discover American s documents; it was MDC, after all, that originally informed American of that fact. Where the prior representation is in the same matter as the current representation, and the matters are factually and legally intertwined, there exists a substantial relationship between the former and current representation. Absent the former client s informed written consent, an attorney may never switch sides in an ongoing legal matter. (City National Bank v. Adams, (2002) 96 Cal. App. 4 th 315, at p. 330.) In rejecting Sheppard Mullin s arguments, the appellate court pointed out at 1032: Application of Rule 3-310(C) does not require representation of both clients as an attorney. The discussion section which follows Rule states: Subparagraphs (C)(1) and (C)(2) are intended to apply to all types of legal employment, including the concurrent representation of multiple parties in litigation or in a single transaction or in some other common enterprise or legal relationship. [Emphasis in original.] * * * It is anathema to the State Bar Rules of Professional Conduct to

31 suggest that an attorney can place himself in a situation in which he undertakes adverse representation of a third party, and the client cannot object because the attorney has promised not to disclose the client s confidential information even though the information may be decidedly helpful to the new client. It is precisely this compromised situation, when the burden of deciding which client to favor is placed solely on the attorney s shoulders and within the attorney s sole power to decide, that Rule is designed to avoid. In other words, Long s promise to maintain the confidences of American is entirely dependent on his selfassumed position as arbiter of his own fidelity and what is and is not a privileged communication. That is not a permissible avoidance of his fiduciary duty. [Emphasis added.] It is inconsequential that American was not a party to the ADO lawsuit. The proscription against adverse representation exists whenever counsel s employment is adverse to the client or former client, and can exist even though a prior client is not a party to the litigation. (Metro-Goldwyn-Mayer, Inc. v. Tracinda Corp. (1995) 36 Cal. App. 4th 1832, 1843.) Conflicts of interest may arise in a variety of circumstances where an attorney assumes a role other than as an attorney at law adverse to an existing client. (Manfredi & Levine v. Superior Court (1998) 66 Cal. App. 4th 1128, Id. at * * * Everything Long learned about the MD-11 while representing American was placed beyond American s control and its confidential status depended on Long s promise to safeguard that information. Clients always have to trust attorneys to maintain confidences imparted during the course of the attorney-client relationship, but they are not compelled to accept the attorney s invitation to trust me when he undertakes to align himself with a new client whose interests pose a conflict of interest. A client is simply not required to forfeit the right to control the disclosure of its confidential information to the unfettered determination of its attorney regardless of his vow to protect the client s confidences. [Emphasis added.] The AA v. Sheppard Mullin decision conflated the duty of confidentiality with the duty to refrain from representing conflicting interests. Among other things, the appellate court extrapolated from a comment to the California conflict rule, 3-310, to the effect that conflicts can

32 appear in various types of legal representation, and applied the comment to non-representational services a lawyer may perform, such as testifying as to a professional opinion. The appellate court also concluded that the AA case against MDC was substantially related to ADO s case against MDC, despite the fact that the engines of the aircrafts were completely different in the equipment at issue in the two cases. The appellate court relied on the fact that Long had assisted AA in restricting ADO s access to AA s confidential information in drawing the thread between the former representation and the subsequent expert witness designation, in order the find a substantial relationship between the two matters. To this writer, it seems a questionable proposition that a lawyer is always presented with a conflict simply because he/she successively represents separate plaintiffs against the same defendant, on similar, but not identical claims. Even the representation of multiple clients with near identical claims in their respective separate, independent actions is permissible, so long as the defendant has sufficient assets to satisfy each of the claims. If a lawyer serving in a representational capacity is free to represent successive clients with similar claims against the same defendant, how can it be that a different rule applies to the lawyer who seeks to serve as an expert witness in the second case, after the first case is fully completed? Further, the appellate court seems to have accepted the speculative argument that Long would not have upheld his promise to refrain from revealing any of the confidences learned during his prior representation of AA when he served as a testifying expert in the ADO case. This smacks of the appearance of impropriety argument rejected in situations such as where spouses are opposing counsel in a case. (See, e.g., ABA Formal Ethics Opinion 340 (1975) and DCH Health Services Corp. v. Waite (2002) 95 Cal. App. 4 th 829. Finally, perhaps one answer relates to whether the lawyer or law firm has previously unsuccessfully requested a conflict waiver from the prior client. In California, similar facts were at issue in the seminal case of Truck Ins. Exchange v. Fireman's Fund Ins. Co. (1992) 6 Cal.App.4th 1050, 1057, giving rise to the famous hot potato rule: the lawyer cannot convert a current client to a former client by dropping the client like a hot potato. However, in Truck Insurance, at issue was a current client, not a former client. Still, the appellate court noted that the disqualified firm had first requested a waiver of the client, and when the client refused, the firm then terminated the attorney-client relationship. This may raise an inference that where the firm has not requested, and has not been refused a conflict waiver by a former client, and the firm relies in a good faith analysis that no disqualifying conflict had arisen, the firm will have more success in defending a subsequent motion for disqualification than in seeking the consent in the first instance.

33 OSBORN M A L E D O N A PROFESSIONAL ASSOCIATION ATTORNEYS AT LAW ( Mark I. Harrison r mharrison@omla\v. com Direct Line North Central Avenue 21 St Floor Phoenix, Arizona Telephone Facsimile omlaw.com [DATE] CONFIDENTIAL VIA AND U.S. MAIL [NAME] Re: Dear This follows up your recent request to retain me to provide expert opinions in the matter referred to above. For your information and possible use, I am enclosing a current copy of my resume. 1. Scope of Engagement. It is my understanding that you wish to retain me as a consulting and/or testifying expert as that term is used in ABA Formal Opinion (1997). For the purposes of this engagement, I will not have a lawyer-client relationship with you, your firm, or any client of your firm. My evaluation, declaration, report and/or testimony would be offered not as an advocate, but as the opinion(s) of an objective witness sworn to provide truthful and accurate information, including opinions adverse to your position if candor so requires. I will take appropriate steps to ensure the confidentiality of our conversations, other communications and any material you send to me. However, as you may be aware, courts may require a testifying expert to disclose at deposition or trial any communication, written or otherwise, with a retaining law firm. Accordingly, in order to avoid unnecessary or unintended disclosure to me of privileged material you wish to protect, we have agreed that my communications will be with you and not directly with your clients unless you are present and agree to the disclosure of information which might otherwise be protected. Moreover, if I am treated as a consultant and participate with you in discussions to develop favorable facts or strategy, the information conveyed to me in such discussions may be discoverable and my status as an independent expert subject to impeachment if I am subsequently identified and/or used as a testifying expert. My retention as an expert is solely with your law firm and that retention will not preclude me from accepting an assignment in the future on behalf of a law firm that may be proceeding against you or your firm in matters unrelated to this matter. I have no such assignments at the present time. However, you agree not to use my retention in this matter to disqualify me or my

34 firm from being adverse to you or other clients of yours in other matters unrelated to the present proceeding. Please inform me if the court in this case has imposed any special confidentiality obligations, such as the requirement that I sign a confidentiality agreement. Once the matter is concluded, it is my practice to offer to return any materials you or your client may wish to preserve and to destroy most of the rest of my file, other than certain basic documents which I retain for my own reference and possible conflicts-checking purposes in future matters. 2. Terms of Engagement. The financial arrangements governing my retention are set forth on the enclosed memo which sets forth my rate and details my firm s policies regarding billing and the payment of fees and costs. That memo is incorporated by this reference in this engagement letter and confirms that you agree to be jointly responsible with your client or third party payor (e.g., insurance carriers) for the payment of my invoices in full. 2.1 Electronic Communications. Communication through , cellular, and wireless devices is cost-efficient and convenient. The firm takes reasonable internal precautions and safety measures to prevent disclosure of client sensitive information when using these forms of communication. But, the firm has no control regarding Internet providers, the Internet itself, wireless communications, or where and how you store confidential information. You must understand it is possible for such communications to be intercepted, misdirected, viewed, heard, or otherwise accessed by third parties, either accidentally or intentionally. You authorize the firm to communicate with you and third parties via , cellular, and wireless methods, and you understand and accept all confidentiality risks associated with such use. It is important for you to let us know if there are or other electronic addresses to which we should avoid sending confidential information. 2.2 Arbitration of Fee Disputes. In the event of a dispute involving our fees or costs, you and Osborn Maledon agree to submit the matter to the fee arbitration process conducted by the State Bar of Arizona. The decision of the arbitrators will be final and nonappealable. You and Osborn Maledon waive the right to file suit in court concerning disputed fees or costs. 2.3 Retention and Destruction of Documents. During our engagement, we are likely to receive copies or originals of documents or other materials belonging to you or others. Once the matter to which those materials relate has been concluded, we will retain and eventually return these materials to you or destroy them in accordance with our file retention policy, a copy of which is enclosed. Please inform us of any change of address so that we can contact you when it is time to return the file V.1

35 3. General. If you have any questions about the contents of this engagement letter (or about the Statement of Billing Practices which is incorporated by reference in this engagement letter), please feel free to contact me without delay. In order to avoid any misunderstanding about the nature and scope of my engagement as an expert, please sign the enclosed copy of the engagement letter on behalf of your clients and return it to me at your early convenience. Sincerely, Mark I. Harrison MIH:rs Enclosures ACCEPTED this day of,, By V.1

36 r STATEMENT OF RTT.T JNG PRACTICES Fees and Costs. Our general policy is to calculate fees for legal services (including expert witness engagements) on the basis of a range of hourly billing rates for each lawyer engaged in providing such services, multiplied by the number of hours (or fractions thereof, in increments of one-fourth or one-tenth of one hour) devoted to the rendering of such services. As we discussed, you will deposit an advance retainer of $. The advance retainer will be placed in a trust account as required by state law that may or may not bear interest. The retainer will be held by us until this engagement in this matter is concluded. The retainer will not be applied against the monthly statements. However, if a monthly statement is not paid when due, Osborn Maledon P.A. may, in its discretion, apply the retainer (or any portion thereof) to the outstanding balance. In addition, we reserve the right to require you to replenish the retainer, or provide an additional retainer. You agree to be jointly responsible with your client or third party payor (e.g., insurance carriers) for the payment of my invoices in full. My current hourly billing rate for service as an expert witness is $ in this matter by, whose hourly billing rate is $. A copy of Firm's website is also enclosed with this letter.. I may be assisted bio from our Our statements are normally rendered on a monthly basis and all bills will be paid by you or your firm and will be payable regardless of when or if your client reimburses you. In addition to our fees, you will be responsible for charges and expenses we incur in connection with this engagement. We will bill you for photocopies ($.20/page), data duplication (from $10 to $45), computer-assisted research (at average imputed cost), messenger services (from $7 to $30 or more, depending on distance), automobile travel ($.53.5 cents/mile), extraordinary staff overtime (at cost), long distance telephone calls (at average imputed cost), and certain specialized technical services, such as computerized litigation support, at $155 to $200 per hour. Any questions concerning our Firm's billing practices, specific invoices, or any other aspect of our engagement may be raised with the lawyer who has overall supervisory responsibility for the matter V.1