When Is It Ethical to Pay a Fact Witness?
LACBA Update, July 2013
By John W. Amberg, member and former chair, LACBA Professional Responsibility and Ethics Committee, and a partner in Bryan Cave LLP, email@example.com. The opinions expressed are his own.
Long before John Grisham, the American humorist Robert Benchley imagined himself on the witness stand, annihilating an aggressive cross-examiner with his keen presence of mind and quick wit. “During these cross-questionings, I am always very calm. Calm in a nice way, that is never cocky. However frantic my inquisitor may wax…I just sit there, burning him up with every answer, winning the admiration of the courtroom….As I step down from the stand, fresh as a daisy, there is a round of applause which the Court makes no attempt to silence. In fact, I have known certain judges to wink pleasantly at me as I take my seat. Judges are only human, after all.”1
If only real life were so simple. Testifying in a real courtroom can be personally time-consuming, disruptive, and stressful. The testimony also may be quite valuable to one side or the other. While Benchley reveled in the psychic satisfaction of his devastating testimony, many fact witnesses seek a different reward–They want to be paid. When is it ethical to pay a fact witness?
Under the common law, expert witnesses may be compensated for their opinions, but percipient or fact witnesses are not supposed to be paid for their testimony. Every witness must swear that he or she will tell “the truth, the whole truth and nothing but the truth,” but it is a truism that paying a fact witness may influence the quality of the truth that gets told. The idealism of our public pronouncements is tempered by the healthy skepticism embodied in our rules. Thus, the comments to ABA Model Rule of Professional Conduct 3.4 (“Fairness to Opposing Party and Counsel”) explain: “Fair competition in the adversary system is secured by prohibitions against…improperly influencing witnesses….[T]he common law rule in most jurisdictions is that it is improper to pay an occurrence witness any fee for testifying….”2 This is reflected in California Rule of Professional Conduct 5-310 (“Prohibited Contact with Witnesses”), which provides: “A member [of the State Bar] shall not:…(B) Directly or indirectly pay, offer to pay, or acquiesce in the payment of compensation to a witness contingent upon the content of the witness’s testimony or the outcome of the case.”3 The rules recognize that payment can undermine the reliability of a witness’s testimony and corrupt the truth-seeking function of the adversary process. Payment to fact witnesses may create a risk of perjury that threatens the integrity of the judicial system. Not every witness is corruptible, but the rules exist to maintain the important perception of objectivity and fairness.
California makes bribery of a witness a serious crime. Penal Code Section 137(a) states: “Every person who gives or offers, or promises to give, to any witness [or] person about to be called as a witness…any bribe, upon any understanding or agreement that the testimony of such witness or information given by such person shall be thereby influenced is guilty of a felony.”4 “Bribe” is broadly defined in Penal Code Section 7 as “anything of value or advantage, present or prospective, or any promise or undertaking to give any, asked, given, or accepted, with a corrupt intent to influence, unlawfully, the person to whom it is given….”5 Penalties under federal law are similar.6
Notwithstanding the traditional prohibition against paying fact witnesses, exceptions nearly swallow the rule. Rule 5-310(B) permits a lawyer to “advance, guarantee, or acquiesce in the payment” to fact witnesses “of (1) Expenses reasonably incurred by a witness in attending or testifying. (2) Reasonable compensation to a witness for loss of time in attending or testifying.” Lawyers commonly view these exceptions as a license to compensate fact witnesses for reviewing documents and meeting with the lawyer in preparation for their testimony, although the language of the rule does not expressly recognize payments for these purposes, and some jurisdictions have concluded that such payments are improper. See, e.g., Goldstein v. Exxon Research & Engineering Company, in which the New Jersey federal court held that the corporate defendant could not pay a retired employee for preparing to testify on facts within his personal knowledge.7 Considering the apparent discrepancy between the rules and actual practice, the ABA Standing Committee on Professional Responsibility and Ethics took a more nuanced position in Formal Opinion 96-402: “The Committee sees no reason to draw a distinction between (a) compensating a witness for time spent in actually attending a deposition or a trial and (b) compensating the witness for time spent in pretrial interviews with the lawyer in preparation for testifying, so long as the lawyer makes it clear to the witness that the payment is not being made for the substance (or efficacy) of the witness’s testimony or as an inducement to ‘tell the truth.’”8 However, it is debatable whether the lay witness can disregard the source of the payment and focus solely on its ostensible neutral purpose.
The ABA Committee wrote that witnesses may be compensated for reviewing records germane to their testimony so long as such compensation is not barred by local law.9 California ethics authority follows the ABA. In Opinion No. 1997-149, the California State Bar’s Committee on Professional Responsibility and Conduct (COPRAC) interpreted Rule 5-310(B) and concluded that it permitted payment for witness preparation time. COPRAC took a pragmatic view: “[R]easonable compensation for preparation time, the amount and nature of which is discoverable and admissible at trial, seems no more objectionable in principle than expert witness fees. In some cases, accurate testimony without substantial preparation may be impossible.”10 The committee’s simplistic equation of experts and fact witnesses, however, ignores that expert witnesses are not commonly prosecuted for perjury and diminishes the potential negative impact on the system’s integrity.
Whether payment to a fact witness is proper depends on whether it reflects actual expenses and loss of time, or is designed to influence the content of the testimony. As the ABA wrote: “[T]he amount of such compensation must be reasonable so as to avoid affecting, even unintentionally, the content of a witness’s testimony.”11 The COPRAC opinion described the factors to be considered: “the witness’s normal rate of pay if currently employed, what the witness last earned if currently unemployed, or what others earn for comparable activity.”12 When the compensation was disproportionate to the witness’s normal pay, courts in other jurisdictions have disapproved the payments.13
A more questionable aspect of the practice of paying fact witnesses arises when it results in a fact witness or his or her testimony becoming unavailable. The judicial system is entitled to every person’s evidence. The ethics rules condemn any effort to suppress evidence. Thus, California Rule of Professional Conduct 5-220 (“Suppression of Evidence”) states: “A member shall not suppress any evidence that the member or the member’s client has a legal obligation to reveal or to produce.” Rule 5-310(A) adds: “A member shall not (A) Advise or directly or indirectly cause a person to secrete himself or herself or to leave the jurisdiction of a tribunal for the purpose of making that person unavailable as a witness therein.” ABA Model Rule 3.4 is more explicit: “A lawyer shall not: (a) unlawfully obstruct another party’s access to evidence….A lawyer shall not counsel or assist another person to do any such act…or (f) request a person other than a client to refrain from voluntarily giving relevant information to another party….” When lawyers retain a fact witness as a consultant and agree to pay for services relating to the case, they are not physically removing the witness from the jurisdiction, but the payment may have the same practical effect of secreting the fact witness and making that testimony unavailable to the parties. The practice of retaining fact witnesses as consultants is seen usually in patent, employment, toxic tort, and product liability cases.
Other than declaring the witness to be a hostile witness and subjecting him or her to cross-examination, does the opposing counsel have any other recourse? Courts in recent years have considered motions for sanctions against the lawyers who converted fact witnesses into consultants, with limited results. In an unreported 2009 decision in the New Jersey federal court, Chief U.S. District Judge Garrett Brown Jr. held that a witness paid as an expert was actually a fact witness and barred the witness, reserving a decision on discipline against the lawyer.14 More recently, the Delaware Chancery Court approved a consulting agreement with a witness wearing two hats, so long as he was being paid for his time as a consultant and not as a fact witness.15 And earlier this year, the New York Court of Appeals affirmed a defense verdict, finding the error to be harmless, but noted the trial court should have instructed the jury to consider the disproportionate compensation paid to a fact witness called by the defendant, who spent one hour authenticating his notes in return for $10,000.16 Additional cases are arising in other jurisdictions including California. In none of the reported cases to date has a court gone so far as to hold that retaining a fact witness is the equivalent of secreting him or her, nor has a court disqualified counsel, but counsel may find that the courts’ past tolerance for the practice of paying fact witnesses has a limit.
1 Robert Benchley, “Take the Witness!” My Ten Years in A Quandary and How They Grew (Harper & Bros. 1936).
2 ABA Model Rules of Prof’l Conduct R. 3.4 cmts. 1 & 3.
3 Cal. R. of Prof’l Conduct R. 5-310(B).
4 Cal. Penal Code §137(a).
5 Cal. Penal Code §7.
6 See, e.g., 18 U.S.C. §201(b)(3).
7 Goldstein v. Exxon Res. & Eng. Co., No. CV 95-2410, 1997 WL 580599 at *3 (D.N.J. Feb. 28, 1997).
8 ABA Formal Op. 96-402 (1996).
10 COPRAC Formal Op. 1997-149.
11 ABA Formal Op. 96-402.
13 See, e.g., U.S. v. Cinergy Corp., No. 99 CV 1693, 2008 WL 7679914 at *12 (S.D. Ind., Dec. 18, 2008).
14 Rocheux International v. U.S. Merchants Financial Group, 2009 WL 3246837 (D.N.J., Oct. 5, 2009).
15 BAE Systems Information and Electrical Systems Integration, Inc. v. Lockheed Martin Corporation, 2011 WL 3689007 (Del. Ct. of Chancery, Aug. 10, 2011).
16 Caldwell v. Cablevision Systems Corp., 20 NY3d 365, 984 N.E.2d 909 (N.Y. 2013).
LACBA's Professional Responsibility and Ethics Committee welcomes new inquiries from LACBA members regarding ethical issues or concerns about professional responsibilities. The identity of the inquirer is kept confidential within the committee. The committee, however, does not publish formal opinions that are the subject of any pending litigation involving the inquirer. If you have an ethical question that you would like the committee to consider, you can mail your written inquiry to Los Angeles County Bar Association, Professional Responsibility and Ethics Committee, P.O. Box 55020, Los Angeles, CA 90055-2020, or e-mail your inquiry marked “Confidential” to Member Services at firstname.lastname@example.org.