Surprising Revelations on Experts and Contingent Fees

Can experts be retained on a contingency fee basis, that is, get paid a fee based on the outcome of the case? At first blush, the answer would seem to be “no.” Litigators will recall, at least in the deep recesses of their memory, that there's something wrong about entering into contingent-fee arrangements with experts. It's not ethical, not kosher, and probably even kind of taboo. Such initial instincts or imprecise recollections are well-founded. Generally, the law does, indeed, frown upon lawyers retaining experts to be compensated depending on the outcome of the litigation.

Courts have noted that state rules of professional conduct prohibit litigants “from entering into contingency fee arrangements with expert witnesses.” See, e.g., Straughter v. Usher Raymond IV, 2011 U.S. Dist. LEXIS 53195, at 7 (C.D. Cal. May 9, 2011) (citing California Rules of Professional Conduct, Rule 5-310(B) and American Bar Ass'n Model Rules of Prof. Conduct, 3.4(b) (2006)). Thus, for example, California's Rule of Professional Conduct 5-310(B) prohibits an attorney from “[d]irectly or indirectly pay[ing], offer[ing] to pay, or acquies[cing] in the payment of compensation to a witness contingent upon ' the outcome of the case.” Id., LEXIS at 7. The American Bar Association's Model Rules of Professional Conduct provide that “[a] lawyer shall not ' offer an inducement to a witness that is prohibited by law.” The comments to this rule recognize that “[t]he common law rule in most jurisdictions is ' that it is improper to pay an expert witness a contingent fee.” Id., LEXIS at 7-8 (quoting from ABA Model Rule 3.4(b) (2006) and comment 3).