Fact Witnesses Can Be Compensated for Case and Discovery Preparation

• Author: Martha L. Kohlstrand
• Pages: 7-7

Published in Litigation News Volume 45, Number 3, Winte r 2020. © 2020 by the Ame rican Bar Associati on. Reproduced with p ermission. All rights r eserved. This in formation or any por tion thereof may no t be copied or disseminate d in any

form or by any means or sto red in an electronic da tabase or retrieval sy stem without the ex press writt en consent of the Amer ican Bar Associatio n.

AMERICA N BAR ASSOCIATION WINTER 202 0 • VOL. 45 NO. 2 | 7

awyers may compen sate fact wit-

nesses in professional f‌ields for

their time in assis ting with a case

and discovery pre paration, so long

as this work is “directl y relat-

ed” to giving testim ony in a proceed-

ing, the Florid a Supreme Court ruled.

In Trial Practices, I nc. v. Hahn Loeser &

Parks, LLP, the Florida court he ld that

although it would n ot permit compen-

sation for all “assis tance with case and

discovery prepa ration,” this type of

preparation was co mpensable if it was

directly related to th e witness prepar-

ing for, attending, o r testifying at pro-

ceedings. A BA Section of Litigation

leaders say that eve n though the deci-

sion opens the d oor wider for fact wit-

ness compensation, attorneys should

take care when de ciding what expens-

es are and are not compensable.

In 2006, Trial Prac tices, Inc. (TPI),

sued an attorney fo r breach of a litiga-

tion consulting ag reement related to an

earlier lawsuit ag ainst the attorney’s for-

mer business partner. The attorney had

engaged TPI to he lp him with the case,

but the case end ed in a mistrial and a

dispute arose over TPI ’s fees. When the

case went to trial in 201 1, the attorney

presented seven fac t witnesses who tes-

tif‌ied as to the issue of a lleged damages.

Three of these witne sses were attorneys

who had been involve d in the f‌irst law-

suit, one was the at torney’s longtime ac-

countant, and three were attorneys from

another law f‌irm.

The jury return ed a verdict in favor

of the attorney, and he moved fo r at-

torney fees and cos ts under a fee-

shifting provisi on in the consulting

agreement. T he fees included approx-

imately $236, 000 for fees paid to the

seven fact witnesses’ professional

f‌irms, inclu ding the attorneys who tes-

tif‌ied. TPI protes ted that the fee re-

quest was impro per on the grounds

that the attorney ha d secretly paid

the fact witnes ses at their profession-

al billing rates rath er than the Florida

statutory rate of $5 p er day for “actual

Fact Witnesses Can Be Compensated

for Case and Discovery Preparation

attendance.” B ut the trial court award-

ed the attorney $2 mil lion in attorney

fees, which in cluded some of the fact

witnesses’ professional fees.

TPI appealed, and Florida’s Second

District Cour t of Appeal rejected TPI’s

arguments bu t certif‌ied the follow-

ing question to the Fl orida Supreme

Court: “D oes Rule 4-3.4(b) of the

Rules Regulati ng the Florida Bar per-

mit a party to make ce rtain payments

for fact witnesses?”

As a backdrop to the cer tif‌ied ques-

tion, the Florid a Supreme Court out-

lined Rule 4-3 .4(b), which permits pay-

ments to witnesse s if they fall within

one of three catego ries: (1) “reasonable

expenses incur red by the witness in at-

tending or testif ying at proceedings”;

(2) “a reasonable, n oncontingent fee

for professiona l services of an expert

witness”; or (3) “reasonable compensa-

tion to reimburse a wit ness for the loss

of compensatio n incurred by reason of

preparing for, atten ding, or testifying

at proceedings.”

The court dec lined to conclude that

“assistance with c ase and discovery

preparation” wo uld always be part of

“preparing fo r, attending, o r testifying at

proceedings.” The more appropriate in-

quiry was wheth er the “assistance with

case and discover y preparation” is di-

rectly related to the witn ess “preparing

for, attending, or tes tifying at proceed-

ings.” Here, th e case was highly complex

and required th e attorney to depend on

professionals. The court concluded that

these professionals had the necessary

knowledge to help d efend the suit, and

it would be unfair fo r them not to be rea-

sonably compensated for any assistance

regarding thes e complex matters.

However, the court emph asized that

because the tri al court’s cost award was

not itemized, a line ite m review would be

necessary to d etermine which expens-

es were directly rel ated to “preparing

for, attending, or tes tifying at proceed-

ings.” Therefore, the court quashed the

Second District’s decision and remanded

By Martha L. Kohls trand, Litigation News Asso ciate Editor

the case with instr uctions that the case

be further re manded to the trial court for

further proceedings.

“This is an unu sual situation in which

the essential fa ct witnesses were at-

torneys, and attorneys’ profession-

al rates are not insig nif‌icant,” notes

John M. Bar kett, Miami, FL, cochair

of the Section of Liti gation’s Ethics &

Professionalis m Committee. “But if you

need someon e to testify as a fact wit-

ness, and the ir professional rates are

high, you need to p ay them fairly,” he

adds. “It ta kes time and eort to be

a fact witness , but it’s also important

not to improperly i nf‌luence witness-

es via compensation,” notes Susan L.

Saltzstein , New York, NY, cochair of the

Section’s Expert Witnesses Committee.

“This opinio n means lawyers will look

closely at whethe r a fact witness’s work

is directly relate d to preparing for, at-

tending, or testif ying at proceedings,”

Saltzstein pre dicts. “As an attorney, al-

ways be mindful of your ti me entries,”

cautions Bar kett. “That way, if you are

later called as a f act witness, a court can

determine wheth er your tasks are direct-

ly related to prepari ng for, attending, or

testifying at pro ceedings, and therefore

compensable.”

RESOURCES

Trial Practices, I nc. v. Hahn Loeser & Parks ,

LLP, No. SC17-2058 (Fla . Dec. 28, 2018).

Fla. Rule 4-3. 4(b), https://bit.ly/LN452- rule.

ABA Formal Op . 96-402 (199 6), Propriety

of Payments to Occurrence Witnesses.

Onik a K. Williams, “M onetary Oer for

Witness Testimony Triggers Suspension,”

Litigation News (Mar. 13 , 2018).

Anton io Robinson, Richar d W. Warren &

Pamela Chandran, “Witness Preparation

– Ethical, Pra ctical, and Commo n Sense

Considerations,” Labor & Employment

Law Section (2018).

Charles S. Fax, “The Parameters and

Pitfalls of Paym ents to Fact Witnesses ,”

Litigation News (Sept . 30, 2016).