A lawyer asks whether it is ethically appropriate to cooperate with, or recommend that a client use, a service that will supply an expert witness in a medical malpractice case where the contract provides that the organization will receive a fee contingent upon the outcome of the lawsuit. The contingent fee will be computed as a percentage of the amount of settlement or judgment recovered from the client.
ABA Op 87-354, the full text of which follows this opinion, addresses the same question. The ABA opinion, although applying the ABA Model Rules of Professional Conduct, is consistent with comparable provisions of the Michigan Code of Professional Responsibility. Consequently it would be improper for a lawyer to cooperate with, or acquiesce in the client using, such a service.
The jurisdiction of the Committee does not extend to questions of law. The The Committee notes that MCLA 600.2169 may apply to contingent fees paid to a service which provides an expert witness in a medical malpractice case. The Committee does not, however, express any opinion as to the applicability of the statute.
APPENDIX TO C-240
AMERICAN BAR ASSOCIATION
STANDING COMMITTEE ON ETHICS AND PROFESSIONAL RESPONSIBILITY
FORMAL OPINION 87-354
Issued 11/7/87
MEDICAL-LEGAL CONSULTING FIRM
Lawyer's cooperation with, or recommendation that client use, medical-legal consulting firm that charges fee to client and limits lawyer's right to future use of firm's expert witnesses may violate ABA Model Rules governing reasonableness of lawyer's fee, improper inducements to expert witnesses, conflicts of interest, and lawyer's exercise of independent judgment.
Digest of Opinion
The committee has been asked whether a lawyer violates the ABA Model Rules by recommending to a client that he engage, or representing a client who engages, a medical-legal consulting firm on a contingent or straight fee basis to work with the lawyer in a medical malpractice or other personal injury case, and by working with the consultant on the case. The committee concludes that such conduct may violate the Model Rules.
The consultant provides an initial report, consultation of its medical directors, assistance with depositions and at trial, and makes available expert witnesses from its "independent consulting staff." It offers services for a direct fee or a contingent fee of 20 to 30 percent. The client contracts directly with the consultant, but the lawyer must agree that he will not contact or use any of the consultant's expert witnesses in any other case without permission of the consultant.
A lawyer typically handles these cases for a contingent fee of 30 to 40 percent. If the consultant is paid a contingent fee of 20 to 30 percent and neither the lawyer's nor the consultant's fee is reduced, the total contingent fees would be 50 to 70 percent. Rule 1.5 states: "A lawyer's fee shall be reasonable." Moreover, the lawyer also has an obligation to provide competent representation, which requires the "legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation."Rule 1.1. In medical malpractice cases, the lawyer normally has a responsibility to locate and select expert witnesses and to work with them in preparing the medical aspects of the case and the witnesses' depositions and testimony. To the extent the consultant assumes responsibility for services that the lawyer normally would provide, and may be required to provide as part of the normal service for a customary contingent fee, the lawyer's service is reduced, and what might otherwise be a reasonable contingent fee becomes unreasonable under Rule 1.5 if no adjustment is made to his fee.
To the extent that the services of the consultant for which it receives a contingent fee are not services that a lawyer normally provides as part of "competent representation," they appear to be services the lawyer normally obtains from expert witnesses. Rule 3.4(b) provides in part that a lawyer shall not "offer an inducement to a witness that is prohibited by law." The comment to the rule notes that in most jurisdictions it is improper to pay an expert witness a contingent fee. If the contingent fee arrangement constitutes an improper inducement to the expert witness under applicable state law, the lawyer's recommendation of an cooperation with the consultant would violate Rule 8.4(a), which prohibits violation of the rules "through the acts of another for example, there was a direct payment of the contingent fee to an expert witness in violation of state law, the participation by the lawyer in the arrangement would violate the rules whether the payment was made by the lawyer or by the lawyer's client.
In addition, requirement that a lawyer who signs the client's contract with the consultant must agree not to contact or use in other cases expert witnesses provided by the consultant without the consultant's permission creates a potential conflict, under Rule 1.7(b), with respect to future representation of other clients with medical malpractice or personal injury claims. To the extent the lawyer has agreed not to use certain expert witnesses, the lawyer has necessarily restricted the options of future witnesses. Personal injury lawyers normally develop substantial knowledge about the experts who are available to testify, and restrictions on use of that knowledge in future cases eliminate one area of expertise on which future clients might be expected to rely in selecting experienced personal injury lawyers.
In representing a client, a lawyer must exercise independent professional judgment. Rules 2.1 and 5.4(d)(3). Although the consultant's contract states that the lawyer retains control of the case, the client becomes committed to the consultant for payment of up to 30 percent of the recovery before the lawyer knows what the expert witnesses will say or even who they will be. The contracts with medical experts are made through the consultant, which retains substantial authority with respect to which experts and how many experts are made available. Thus, the contingency fee contract results in substantial practical restrictions on the exercise by the lawyer of independent judgment in the selection and use of expert witnesses to which the client is entitled.
Informal Opinion 1375 is superseded by this more comprehensive opinion. (Although this opinion addresses only the Model Rules, the same results would obtain under the Model Code.)
(ABA Standing Committee on Ethics and Professional Responsibility, Formal Opinion 87-354; 11/7/87)