Expert Witness Blog

Expert Witness Financials

How far can opposing counsel go in forcing expert witnesses to disclose their tax returns, financial records, and 1099s?

Attorney James Rotondo explains:

Expert’s Tax Reports, Financial Records/1099s

  1. As part of an effort to impeach an opposing expert witnesses, the cross-examining attorney may request an expert’s financial information in the form of tax or financial records.  These records are relevant to showing potential bias.  It is widely believed that expert witnesses may be expected to express opinions that favor the parties who engage them and who pay their fees.  Courts conduct a balancing test when determining the scope of discovery of an expert’s financial history.  This balancing test involves the weighing of the expert’s privacy rights versus the legitimate need to probe for potential bias.
  2. Experts may seek to protect themselves by making concessions to financial facts that are likely discoverable.  For example, experts may disclose the amount or percentage of time that they spend consulting in litigation and/or consulting for a particular side; they may disclose their rates, the states in which they have testified, the number of depositions that they have given as an expert and the approximate percentage of income received from consulting as an expert.
  3. Courts realize that  discovery directed toward an expert’s finances is often intended to harass and intimidate.  Most courts, therefore, will find that production of exhaustive financial documentation is only appropriate in the most compelling circumstances, and “only after less intrusive means of obtaining bias-related evidence have been explored.”  Am. Family Mut. Ins. Co. v. Grant, 22 Ariz. 507, 514 (Ariz. Ct. App. 2009).

He offers the following practice tips to expert witnesses:

  1. If the issue arises at deposition for the first time, experts should not attempt to avoid questions regarding financial facts that are likely to be discoverable, such as how often they have been retained by counsel’s firm, percentage of work that they do for plaintiffs or defendants, or what percentage of their income is derived from forensic work. This will likely deter a court from allowing more invasive discovery.
  2. Experts should carefully weigh the decision to accept employment from a lawyer or company with which they have a long history if they want to avoid running the risk of discovery into their financial history of such retention.
  3. Consider asking counsel to enter into an agreement limiting the use of discovery aimed at financial information if the plaintiff and defense experts are “professional witnesses.”

 

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