Complex Litigation

Liability Exposure When Experts Flub

By Michael Hoenig - New York Law Journal - November 14, 2016

On Oct. 19, in Fore v. State,1 a Florida appellate court tossed out a civil contempt fine of $6,670 imposed upon an expert after a defendant's criminal trial for drunk-driving manslaughter. It seems that the accident reconstruction expert completed an affidavit in support of defendant's application for post-conviction relief that contained incorrect information based on the expert's misinterpretation of a report from Toyota regarding data from the victim's vehicle. During the expert's preparation for the post-conviction evidentiary hearing, he realized that certain opinions in his affidavit were wrong. He notified defense counsel but took no action to change his affidavit or otherwise inform the court of his changed opinions.

The state successfully moved for sanctions. The appellate court reversed, however, because the expert did not intentionally violate a court order. What caught this writer's eye and stimulated this column is the following policy statement by the court: "[A]ggressive application of the inherent authority…to sanction a non-party expert witness in a criminal case would 'create a chilling effect on a party's exercise of [the] constitutional right to freedom of speech, access to the courts, and due process.'"2

In civil litigation, when retained or testifying experts err materially, causing a case or settlement loss, do they get some kind of immunity so that access to experts is not "chilled" by allowing experts to be sued frequently? The answer to this question is not so easy. It seems there are competing policy tensions and, depending on the applicable legal precedents, suit might be permitted or foreclosed. A bright-line rule is elusive so affected parties and counsel have to slog through the legal swamp, so to speak. Fortunately, there is some helpful commentary cited in the endnote.3 Additionally, case law seems to be trending toward permitting some lawsuits.4 Counsel's awareness of the potential for exposure is recommended.

Some pivotal, practical questions, are: If a claim has been thrown out because an expert botched his assignment or because the expert was found unreliable in key areas, does that open the expert to being sued for professional malpractice, negligence or breach of contract? In turn, could permitting such a claim expose the lawyers who retained that expert to direct suit by frustrated clients or to third-party claims by experts who are sued by losing litigants? Variations on these thematic questions can proliferate.

What if a plaintiff were forced to settle a sizeable claim for a fraction of what it was worth? Could the expert who materially flunked on the witness stand be sued for the difference between the pittance paid in settlement and the more generous one which may have been obtained had the expert not failed? And, if so, could the lawyer who hired, prepared and presented the expert be implicated in claims based on that expert's failure to pass muster?

Do experts who hold themselves out as professionally gifted or capable of giving opinions in complex litigation vouch for their own reliability? Is there something akin to an expert's implied warranty of reliability? Is that an assumption lawyers who retain experts should reasonably make? Or must lawyers be more suspicious, more proactive and critical in ferreting out below-par expertise? If so, how can that duty practicably be discharged when lawyers are not versed in the scientific or technical discipline of the expert? Will lawyers get sucked into litigation regardless? So many lawyers retain experts on scant referrals or via referral services or agencies—a litigation sub-industry in itself. Are such referral agencies themselves potential targets of suit when an expert egregiously falls below the mark?

Illustrative Cases

In a Pennsylvania Supreme Court decision called LLMD of Michigan, Inc. v. Jackson-Cross,5 a commercial litigation, an attorney retained the chairman of a consulting company as an expert on the issue of the plaintiff's lost profits. The expert provided a calculation for trial estimating lost profits to be $6 million. The calculation was prepared by one of the expert's employees using a computerized accounting spreadsheet program.

The expert offered his opinion at trial but the situation unraveled during cross-examination. Defense counsel established that the calculation contained a mathematical error that completely undermined the basis for the opinion on damages. The expert conceded the error. Worse, because he had not performed the calculations himself, he was unable to explain the mathematical error or to recalculate the lost profits by correcting the error while on the stand. Defense counsel moved to strike the testimony and the trial judge did so, instructing the jury to completely disregard the expert's testimony. The next day, critically hamstrung, the plaintiff settled for a fraction of even the corrected, lower computation of lost profits. A lawsuit against the expert and his consulting firm followed.

The key question bothering the Pennsylvania courts was whether the "witness immunity" doctrine, immunizing parties and witnesses from subsequent damages liability for their testimony in judicial proceedings, protected the expert from suit. Although the "witness immunity" rule often has been raised in subsequent defamation suits, the doctrine is not limited to defamation actions. Immunity has been justified by courts to avoid litigants and witnesses from imposing two forms of self-censorship: (1) the witness might be reluctant to come forward and testify; and (2) once on the stand, the testimony might be distorted by fear of subsequent liability, resulting in the shading of testimony to favor a party or to magnify uncertainties thereby distorting candid, objective evidence.

The Pennsylvania Supreme Court, however, allowed the lawsuit against the expert for professional negligence in forming the opinion, saying that the judicial process "will be enhanced only by requiring that an expert witness render services to the degree of care, skill and proficiency commonly exercised by the ordinarily skillful, careful and prudent members of their profession." 6 The Pennsylvania court cautioned that mere challenge of the expert by another expert's competing opinion that prevails is not grounds for liability.

In a California appellate court decision, Forensis Group, Inc. v. Frantz, Townsend & Foldenauer,7the underlying case involved a product liability setting. In a nutshell, Mr. Hernandez was killed when struck by a forklift in a workplace. The family retained the law firm to pursue a products liability claim against the manufacturer. The suit alleged defects in the backup alarm and side mirrors of the forklift. The family's law firm consulted Forensis, an expert clearinghouse, which referred a mechanical engineer named Malcolm Robbins to be the expert.

Robbins inspected the vehicle, reviewed documents provided to him by the law firm, including publications of the Society of Automotive Engineers (SAE) regarding safety alarms on such vehicles. At his deposition, however, he did not identify any applicable safety standards with respect to the manufacturer's installation of a backup alarm. The manufacturer successfully moved for summary judgment contending the forklift was not defective and met all applicable safety standards.

The expert had prepared a declaration in opposition to the motion stating that the vehicle failed the criteria of a particular SAE industry standard. However, the expert was now contradicting his earlier deposition testimony. He also failed to adequately explain why he now was claiming a violation of an SAE standard when he did not use that standard in performing his tests on the vehicle and when giving deposition testimony.

The Hernandez family settled their remaining claim against the rental company. They did not appeal the summary judgment ruling. The original law firm then referred the family to a lawyer who was known to the firm from prior dealings. The new lawyer sued Forensis, the expert referral firm, and the expert on many professional negligence theories, alleging that Robbins failed to exercise the care and skill that a member of the forensic engineering profession should have. This negligence allegedly caused the Hernandez family to forfeit its $1.5 million claim. They also alleged that Robbins' expertise had been misrepresented.

Lawyers' Exposure

The sued experts, in turn, filed separate cross-complaints against the Hernandez family's original lawyers, claiming that the law firm's professional activities should subject the firm to a share of the loss attributable to unsuccessful opposition to the summary judgment motion in the original action. They argued the law firm waited too late to consult Forensis to obtain a suitable expert and/or had failed to provide Robbins with sufficient information to allow him to provide adequate services. The law firm allegedly failed to provide the experts with relevant information before and after the hiring; failed to rehabilitate Robbins at his deposition regarding use of the SAE industry standards; and failed to provide the trial court with accurate products liability law about admissibility of industry standards evidence.

The sued experts retained a legal expert who opined that the law firm may have breached its duty of care to its client and was therefore responsible for losing the summary judgment motion. The law firm, in turn, retained legal and engineering experts. Robbins and Forensis settled with the Hernandez plaintiffs.

The California Court of Appeals, following an elaborate consideration of the public policy issues and analogous malpractice scenarios, examined the nature of the relationship between the experts and the law firm. Quoting from a prior case, the court observed that, "In today's technologically driven litigation [many kinds of experts] frequently are hired to assist a party in preparing and presenting a legal case. Often they play as great a role in the organization and shaping and evaluation of their client's case, as do the lawyers. Those who provide these services are selected for their skill and ability and are compensated accordingly just as any other professional. As experts they are subject to liability if they perform services negligently… Like other defendants in negligence lawsuits, litigation support professionals are only responsible for the losses they cause."8

By seeking equitable indemnity against the law firm, the sued experts were contending that law firm personnel were joint tortfeasors with them in representing the Hernandez plaintiffs. What is the true relationship of a law firm and retained experts? The court stated [citing a treatise] that the duty of an attorney who hires an expert witness is to "make sure that the expert, particularly the inexperienced expert, understands the governing legal principles and elements that each party to the litigation must prove in order to prevail." Further, an expert "is not a mechanical toy that can simply be wound up and turned loose. Regardless of the expert's skill, it is the lawyer's responsibility to make sure that his or her expertise is presented to the trier of fact in an admissible and persuasive way. To accomplish this task, the lawyer needs to understand the substantive details of the expert's testimony and field of expertise."9

The appellate court concluded that experts ordinarily should be permitted to sue the law firm for equitable indemnification of professional malpractice damages for which they have become liable. Policy issues to the contrary were not insurmountable and did not outweigh yet another public policy: "that of protecting the professional interests of all expert witnesses generally to participate in litigation, and the interests of the judicial system in obtaining the assistance of such expertise. These interests are significant enough to warrant an expert's being accorded a right to recourse against those responsible, if any professional negligence should occur on the part of counsel who retained those expert witnesses, with respect to presenting their evidence and defining the proper scope of the experts' duties and obligations within the litigation setting, if any harm to the client should occur. Such a right to recourse for expert witnesses could include equitable indemnity claims."10

Conclusion

The California and Pennsylvania decisions expose a bitter reality. Sometimes, professional services attending litigation fall below the mark. That causes some lawsuits to be filed. Legal malpractice is, in a sense, a sleeping tiger capable of being aroused, and of pouncing and biting hard. Experts and other litigation support professionals are likewise potential targets for suit when they are negligent and cause loss. What perhaps is not fully appreciated is that an expert's flub may implicate the lawyer's own exposure. Given the purported "duties" a lawyer may have regarding the retention, preparation and presentation of experts, as the California decision posits, lawyers may even become the choice "deep pocket" targets when experts who botch their assignments have limited resources.

Endnotes:

1. 2016 Fla. App. LEXIS 15585 (Ct. App. Oct. 19, 2016).

2. Id., LEXIS at *5.

3. E.g., M.T. Nelson, "Survey: "Pace v. Swerdlow": Can Expert Witnesses Face Liability for Changing Their Minds? The Tenth Circuit Weighs in on the Element of Proximate Cause in a Claim of Expert Negligence," 86 Denver U.L. Rev. 1199 (2009); L.S. Weiss, "Expert Witness Malpractice Actions: Emerging Trend or Aberration?" ALI-ABA Course of Study Materials (Course Number SN058, Feb. 2008); A. Jurs, "The Rationale for Expert Immunity or Liability Exposure and Case Law Since Briscoe: Reasserting Immunity Protection for Friendly Expert Witnesses," 38 U. Mem. L. Rev. 49 (Fall 2007); J.P. McCahey, "Should Experts Receive Witness Immunity?" ABA Section of Litigation, Commercial and Business Litigation, pp. 10-12 (Fall 2006).

4. See e.g., Pollina v. Dishong, 2014 Pa. Super. LEXIS 2306 (Pa. Super. Ct. July 22, 2014); Hoskins v. Metzger, 2012 Fla. App. LEXIS 21757 (Fla. Ct. App. Dec. 19, 2012); Marrogi v. Howard, 2002 La. LEXIS 19 (La. Sup. Ct. Jan. 15, 2002); Rohrer v. Connelly, 2000 Pa. Dist. & Cnty. Dec. LEXIS 237 (Pa. Common Pleas, July 21, 2000). See also, Pace v. Swerdlow, 2008 U.S. App. LEXIS 4631 (10th Cir. March 4, 2008) (the case discussed in the Denver U.L. Rev article cited in the previous endnote).

5. 740 A.2d 186 (Pa. Sup. Ct. 1999).

6. Id., at 191.

7. 2005 Cal. App. LEXIS 929 (Cal. App. 4th Dist., June 9, 2005).

8. Forensis Group, 2005 Cal. App. LEXIS 929, at *34 (quoting from Mattco Forge, Inc. v. Arthur Young & Co., 52 Cal. App. 4th 820, 60 Cal. Rptr. 2d 780 (Cal. App. 1997)).

9. Forensis Group, 2005 Cal. App. LEXIS 929, at *35-*36.

10. Id., LEXIS at *40.

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