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The Parameters and Pitfalls of Payments to Fact Witnesses

By Charles S. Fax, Litigation News Associate Editor

Trial lawyers of a certain age were taught in law school that it is unethical to pay a fact witness more than the statutory fees for attendance at trial and coverage of travel expenses. Most jurisdictions, however, permit some form of fact witness compensation. Since payment rules vary from state to state, lawyers should closely examine the law of the subject jurisdiction. If, after considering the applicable rules, you decide to compensate the non-expert witness, make it clear that you are paying for time, not for testimony.

Ethical concerns relating to the compensation of fact witnesses can be traced to the Supreme Court's Olympian pronouncement of the rule, in United States v. Bryan, where the Court eloquently said "the public . . . has a right to every man's evidence." There were also practical reasons for the prohibition against payment to fact witnesses, including the concern that such payments could induce outright perjury, or short of that, cause a witness to shade the truth. Litigants who could not afford to make payments could be deprived of justice. Potential witnesses might be paid to avoid trial. Finally, there was the overarching concern that it made the justice system look bad—what lawyers would call "the appearance of impropriety."

Today, while those lofty principles may still abide, payments beyond statutory fees are allowed in most jurisdictions. Most states, for example, follow ABA Formal Opinion 96-402 (1996), interpreting ABA Model Rule of Professional Conduct 3.4(b) and its comment:

A lawyer, acting on her client's behalf, may compensate a non-expert witness for time spent in attending a deposition or trial or in meeting with the lawyer preparatory to such testimony, provided that the payment is not conditioned on the content of the testimony and provided further that the payment does not violate the law of the jurisdiction.

The key to this holding is that the witness is not being paid for his or her testimony. Rather, the witness is being reimbursed for income that would have been earned but for the diversion of time necessary to prepare to testify and to testify. Some jurisdictions go beyond that and authorize the payment of reasonable compensation for pretrial fact-finding and preparation over and above lost opportunity costs.

The New York State Bar Association Committee on Professional Ethics, for example, in Opinion No. 668 (1994), held that "unemployed, self-employed or retired persons [are] entitled to reasonable compensation, not limited to lost wages or out-of-pocket expenses, since 'even recreation time is susceptible to valuation.'" However, the Committee on Legal Ethics in at least one state, Pennsylvania, held in Opinion No. 95-126A that Pennsylvania's version of Rule 3.4(b)] "'can be read to disfavor compensation to non-expert witnesses for the time invested in preparing for testimony.'"

Even assuming that a witness may be paid for his or her testimonial preparation and testimonial time, two important questions remain: how much time, and at what rate of compensation? The touchstone for both is "reasonableness." Resolving reasonableness is a fact-intensive inquiry, however, as a reasonable rate of compensation for one witness or in one jurisdiction may be unreasonable in another. Likewise, the amount of time necessary for adequate preparation could vary greatly from case to case even in matters that are superficially similar.

I had a case in which I needed the occurrence testimony of a consultant who was an expert witness from time to time. He wanted to charge me his expert witness rate. I explained that I was not retaining him as an expert, but rather, as a fact witness. I asked him to quote me his hourly rate for consultation services other than as an expert witness, and to warrant that he would have earned that amount but for the time spent in the litigation. He did so, and we agreed on that figure. Next, I had to satisfy myself that the amount of time he spent in preparation was reasonable. While I initially thought that he had devoted more time to the matter than necessary, he ultimately persuaded me otherwise. Thus, I was satisfied that if I had to account in court for the payment—the bottom line for a litigator—I could do so.

As the rules vary from state to state, the next time a fact witness asks you for payment, you would be well advised to examine the law of the subject jurisdiction very carefully. Indeed, given the potential consequences of a misstep, it may not hurt to get an independent legal opinion. And as you would do with an expert, make it clear that you are paying compensation for time, not for testimony.

Keywords: expert witness, compensation, ABA Model Rules, fact witness, legal ethics



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