Risk Update

Conflicts Considerations — Expert Witness Conflicts (Public and Private) in Depth

When employment causes a conflict of interest for expert testimony” —

  • “James Finkel of Kroll considers the public sector and private sector considerations around conflicts of interest in expert testimony.”
  • “It is explicitly prohibited under regulation (5 CFR § 2635.805 (a)) for federal employees to serve as an expert witness, other than on behalf of the US (with or without compensation), in any proceeding before a court or agency of the US in which the US is a party or has a direct and substantial interest unless the employee’s participation is authorised by the relevant federal agency.”
  • “This rule importantly provides a means of review and consideration of the conflict-of-interest issues involved with the potential expert testimony and thus does not act as an absolute bar – in contrast to the blanket prohibition that the Fifth Circuit in the Hoover case disallowed.”
  • “The US federal’s Ethics in Government Act also provides restrictions on former federal employees. This ethics rule thus squarely addresses what a conflict-of-interest process would otherwise entail – if there was substantial participation in the matter at issue while previously in government by the potential expert witness, and involving the party on whose behalf the expert would be testifying. Thus, it would seem the precision of this rule would allow it to stand, whereas a blanket prohibition on a former government employee from being an expert witness would presumably not be upheld. “
  • “The New York Public Officer’s Law § 73(3)(a) provides that: ‘No statewide elected official, member of the legislature, legislative employee, full-time salaried state officer or employee shall receive, directly or indirectly, or enter into any agreement express or implied for, any compensation, in whatever form, for the appearance or rendition of services by himself or another against the interest of the state in relation to any case, proceeding, application or other matter before, or the transaction of business by himself or another with, the Court of Claims.'”
  • “The Connecticut rule appears to provide a blanket ban on state employees acting as expert witnesses in state-related regulatory proceedings, also having no presence of a conflict-of-interest determination process, which may be the rule’s shortcoming under the federal legal precedents.”
  • “The second rule above raises fascinating questions in the rare case where the state employee is affiliated with a firm that might have a testifying engagement for an ‘adverse’ party in a state regulatory proceeding. In such a case, the firm would be barred even if the state employee would not be involved in the matter in any way.”
  • “Some states go beyond the state employee context, for example, prohibiting a treating health care provider from serving as an expert witness in matters involving one of their clients. It seems incongruous that the state should be displacing the professional conflict of interest determinations that such health care provider would otherwise make under his or her own ethical considerations and standards of conduct.”
  • “For testifying experts in the private sector, conflicts of interest remain either individualised – where the expert is not employed by a larger firm (and it appears that even being an outside consultant to a larger firm would continue to allow the expert to be considered ‘independent’), or collective – where the expert is an employee of a larger company or enterprise and the firm’s own conflict issues come into play.”
  • “One thing that remains clear is that in all cases (perhaps until artificial intelligence reaches new heights), a testifying expert must still be a ‘person’. Although not the only time explored, the Delaware Chancery Court considered whether a party to an action could designate a corporation to serve as an expert witness. The court answered in the negative on the ground that, under the rules of evidence, an expert witness must be a biological person – i.e., possess “a body and a brain” in re Dole Food Co, Inc. Stockholder Litigation, (2015).”
  • “Whatever the employment status of the testifying expert may be, conflicts of interest relating to a particular litigation must always be considered. And in the case of the testifier being an employee of a larger firm, this can raise thornier issues in resolving certain eligibility requirements. For those acting as independent (non-employee) expert witnesses, and those employed at larger firms but nevertheless providing testimony in their independent capacity, it is imperative that conflicts of interest are cleared through a robust process.”
  • “Such a process necessarily involves the consideration of ‘issue’ conflicts and ‘party’ conflicts. The former, in essence, is whether the testifier previously opined in a contradictory way to the testimony now being sought. The latter involves a clear understanding of who all the parties to the litigation are (sometimes scratching below the surface to determine corporate holdings or relationships), and in certain circumstances, consideration even of non-parties that may be directly affected by the outcome of the litigation.”
  • “For large companies, such as consulting or accounting firms, to determine ‘direct’ party conflicts requires adequate recordkeeping of engagements, but the process also involves casting the net over broader ‘indirect’ conflict issues engendered by wide-ranging and significant business relationships (as well, at times, whether the firm can maintain its ‘independence’ when an employee is an expert testifier).”
  • “In all cases, the conflict-of-interest resolution process ultimately rests with the expert witness himself or herself as a matter of professional responsibility, being both thorough with respect to issues and parties, but also making, as appropriate (and within the bounds of confidentiality), adequate disclosure. If an expert witness holds any doubt as to whether there may be even a highly remote or conceptual conflict, transparency about what the issues may be, whether in disclosure to counsel or stated in the expert report, is always the best course of action.”