IT IS PROPER TO CONDUCT DISCOVERY TO ASCERTAIN THE NATURE OF THE FINANCIAL RELATIONSHIPS AND REFERRALS BETWEEN PLAINTIFFS ATTORNEY AND THEIR EXPERTS:
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1 ! CASENOTE JAMES GRAFTON RANDALL, ESQ. LAWATYOURFINGERTIPS IT IS PROPER TO CONDUCT DISCOVERY TO ASCERTAIN THE NATURE OF THE FINANCIAL RELATIONSHIPS AND REFERRALS BETWEEN PLAINTIFFS ATTORNEY AND THEIR EXPERTS: 1. EVIDENCE OF LIENS IS ADMISSIBLE AND RELEVANT AS WELL AS THE NATURE OF HOW MATTERS ARE REFERRED TO A DOCTOR, THE ARRANGEMENTS THE DOCTOR HAS WITH THE PLAINTIFF S COUNSEL AS TO COMPENSATION AND FINANCIAL INTEREST IN THE OUTCOME Whether in questions in a deposition, or interrogatories, or requests for admissions [accompanied by Form Interrogatory 17,1], demands for production of documents [or a combination], it is important to investigate the nature of the relationship between the experts [doctors, etc.] that a plaintiff s attorney has sent his client to or retained in a case. This information is relevant to ascertain the issues of bias, or to allow an attorney to investigate such matters as whether the expert has recommended an allegedly unnecessary and costly procedure with greater frequency in litigation cases, and whether the expert, as a treating physician, allegedly overcharged for the medical services at issue in the lawsuit The admissibility of a document bears on its discoverability in the sense that if the document is admissible, it necessarily is discoverable. ( Norton v. Superior Court (1994) 24 Cal.App.4th 1750, ) But the inverse is not necessarily true: the fact that evidence is not admissible does not mean that it is also not discoverable. A claim that discovery is not warranted because the evidence disclosed would not itself be admissible is untenable. It is settled that admissibility is not prerequisite to discovery. ( Davies v. Superior Court (1984) 36 Cal.3d 291, 301; see also Glenfed Development Corp. v. Superior Court (1997) 53 Cal.App.4th 1113,1117 [ Admissibility is not the test, and it is sufficient if the information sought might reasonably lead to other, admissible evidence.] Volkswagen of America, Inc. v. Superior Court (2006) 139 Cal.App.4th 1481, The compensation and expenses paid or to be paid to an expert witness by the party calling him/her is a proper subject of inquiry by any adverse party as relevant to the credibility of the witness and the weight of his testimony. Evidence Code 722(b).
2 Possible bias of a witness extends to more issues than merely his or her compensation. Evidence to show bias or interest of a witness in a cause covers a wide range and the field of external circumstances from which probable bias or interest may be inferred is infinite. The rule encompasses all facts and circumstances, which when tested by human experience, tend to show that a witness may shade his testimony for the purpose of helping to establish one side of the cause only. Carroll v. State (Tex.Cr.App.,1996) 916 S.W.2d 494, [Emphasis in original] -- A witness' pecuniary interest in the outcome of the trial is also an appropriate area of cross-examination. The relationship between an attorney s office and the expert and whether the doctor is being paid on a lien basis and the referral of the patient to the doctor are all areas of possible bias, motive and/or incentive which may affect the witnesses credibility and/or the weight of his or her testimony. See: Flores v. Miami-Dade County (Fla.App. 3 Dist., 2001) 787 So.2d 955, 957 [not error to allow physician to be examined as to how cases are referred to his or her office]. A medical expert can be questioned about fee arrangements, referral of the patient, prior testimony for the same party, and financial interest in the outcome of the case. Sears v. Rutishauser (1984) 466 N.E.2d 210, 211 [Such cross-examination should may be allowed as to the number of referrals, their frequency, and the financial benefit derived from them]. Cross-examination of a doctor on whether or not he has a lien on any recovery in the matter is necessary not only to ascertain whether he or she has an economic interest in the recovery Plaintiff may get but also due to the fact that physicians may inflate the charges when treating a patient on a lien basis. California courts have held that it is well-established that doctors may charge for patients being treated on a lien basis. For example, see: Nager v. Allstate Ins. Co. (2000) 83 Cal.App.4th 284, 291: Personal injury litigation places a central focus upon medical specials, litigation-oriented medical reports, and depositions and testimony by treating physicians and medical experts. Simple economics preclude such costs from being incurred on a pay-as-you-go basis; rather attorneys, litigants and medical providers rely upon such devices as liens against anticipated judgments or settlements to secure payment, and medical liens are frequently reduced during the process. As the court stated in Lovett v. Carrasco (1998) 63 Cal.App.4th 48, 57, some medical providers with liens may overtreat patients to run up medical special costs, thereby increasing their chances of getting paid. [Emphasis added]. It is always proper for a party against whom a witness has given damaging testimony to show out of the mouth of the witness himself, if he can, or by other sources, if necessary, that such witness has an unusual interest in the outcome of the case. (People v. Sacramento Butchers' Protective Assn. (1910) 12 C.A. 471, 494, 107 P. 712; see Ev.C.
3 780(f). 3 Witkin, Cal. Evid. 4th (2000) Presentation, 270, p Inquiry into the possible financial stake of a witness in a particular outcome of a case in which the witness is testifying is a proper subject for cross-examination. Wheeler v. U.S. (C.A.Mass. 1965) 351 F.2d 946, 947. It is, of course, an elementary rule that the financial interest of a witness in the result of a case in which he testifies is a proper subject of cross-examination as tending to show his bias and affecting his credibility. People v. Philpott (1962) 201 Cal.App.2d 859, 864. Counsel may be permitted to inquire regarding (1) the annual income derived from services relating to serving as an expert witness and (2) the frequency with which the witness' testimony in prior cases had been for people suing doctors. The expert may also be cross-examined regarding the number, frequency and financial benefit of patient referrals from the adverse party's attorney. Pappas v. Fronczak (Ill.App. 1993) 249 Ill.App.3d 42, 49, 618 N.E.2d 878, 884. In the recent case of Katzman v. Rediron Fabrication, Inc. (Fla.App. 4 Dist., 2011), the court rejected an attempt by a surgeon to bar any questioning by the defense as to the number of discectomies the doctor performed previously, and the amounts he charged litigation vs. nonlitigation patients for the same procedures procedures which the court described as controversial and one which in 2008, the Center for Medicare and Medicaid Services issued a national non-coverage determination finding no evidence that this procedure improves health or reduces pain. In this relatively minor car accident case, the plaintiff was referred to the doctor by the Plaintiff s attorney. The court held that the physician is not merely a witness retained to give an expert opinion about an issue at trial. Likewise this is not a typical treating physician that a patient independently sought out. A lawyer referred the patient to the physician in anticipation of litigation and therefore the physician has injected himself into the litigation. This witness potentially has a stake in the outcome of the litigation not because of the LOP because of the referral by the lawyer. The LOP merely gives the doctor the assurance that his/her bill will be paid directly from the proceeds of any settlement or verdict. It is the direct referral by the lawyer to the doctor that creates a circumstance that would allow the defendant to explore possible bias on the part of the doctor. As the court held: In this case, the discovery that is sought is not relevant merely to show that the witness may be biased based on an ongoing financial relationship with a party or lawyer. We agree that Elkins discovery should generally provide sufficient discovery into such financial bias. The discovery here is relevant to a discrete issue, whether the expert has recommended an allegedly unnecessary and costly procedure with greater frequency in litigation cases, and whether the expert, as a treating physician, allegedly overcharged for the medical services at issue in the lawsuit. The limited intrusion into the financial affairs of the doctor in this case is justified by the need to discover case-specific information relevant to substantive issues in the litigation, i.e., the reasonableness of the cost and necessity of the procedure. In our view, it meets the requirement of unusual and compelling
4 circumstances. 2. PLAINTIFF S COUNSEL IS NOT ENTITLED TO SEEK AN EXPERT S TAX RECORDS OR PRIVATE FINANCIAL RECORDS. AN ESTIMATE OF INCOME AND REFERRALS IS SUFFICIENT: A litigant's right to evidence of an expert's potential bias is not unfettered or unconditional. A constitutional amendment adopted in 1974 elevated the right of privacy to an inalienable right expressly protected by force of a constitutional mandate [ Stony Brook HOA v. Superior Court (2001) 84 Cal.App.4th 691, 699.] Stony Brook followed the Allen standard of percentages and not requiring exact information about specifics [ Allen v. Superior Court (1984) 151 Cal.App.3d 447]. A demand for the 1099 s provided to an expert is improper and an objection on the grounds of invasion of privacy must be asserted. The Legislature put an end to the discovery abuse of requesting tax information by enacting California Revenue and Tax Case law has always recognized a privilege not to be forced to disclose income tax records. Schnabel v. Superior Court (1993) 5 Cal. 4th 704; Sav-On Drugs, Inc. V. Superior Court (1975) 15 Cal.3d 1; Webb v. Standard Oil Co. of California (1957) 49 Cal.2d 509; Rifkind v. Superior Court (1981) 123 Cal.App.3d 1045; Brown v. Superior Court (1977) 71 Cal.App.3d 141. It follows that a court must not generously order disclosure of the private financial affairs of nonparties without a careful scrutiny of the real needs of the litigant who seeks discovery... [Citation omitted.] Thus, in Allen, the court took some care in limiting the level of detail an expert may be compelled to disclose: to show bias or prejudice, real party need not learn the details of his billing and accounting or the specifics of his prior testimony... Exact information as to number of cases and amounts of compensation... is unnecessary for the purpose of showing a bias. [Citation omitted.] [84 Cal.App.4th at 699.] Questions about exact amounts of money in a year is a violation of the witness' constitutional right to privacy. [ Allen, 151 Cal.App.3d 447.] In rejecting the trial courts order, the Fourth District Court of Appeal said: The trial court's orders, by requiring a precise accounting of Dr. Schwab's expert practice, excessively intrude upon Dr. Schwab's legitimate privacy interests and unnecessarily threaten Stony Brook's right to present expert testimony on a material issue in the case. [84 Cal.App.4th at 700.]
5 The percentage testimony by an expert was sanctioned by Allen v. Superior Court (1984) 151 Cal.App. 3d 447. It established the standard used with forensic experts for crossexamining as to potential bias. The expert can be asked the compensation being received in the case they are testifying in, and the percentages of plaintiffs versus defense work. [151 Cal.App. 3d at 451.] At deposition, the medical expert may be asked questions directed toward disclosing what percentage of his practice involves examining patients for the defense and how much compensation he derives from defense work. To show bias or prejudice, real party need not learn the details of his billing and accounting or the specifics of his prior testimony and depositions. As petitioner points out, publications which index the testimony of medical units are available to real party. Exact information as to number of cases and amounts of compensation paid to medical experts is unnecessary for the purpose of showing a bias. Allen v. Superior Court (1984) 151 Cal.App.3d 447, 449.
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