Expert Witness Liability

When are Expert Witnesses Liable for Malpractice? - LLMD of Michigan, Inc. v. Jackson-Cross Co., 559 Pa. 297, 740 A.2d 186 (Pa. 1999)

[Update - 15 Aug 04 - Louisiana reaches the same result in Louisiana - Marrogi v. Howard, 805 So.2d 1118 (La. 2002). The Third Circuit distinguished LLMD in Huges v. Long, 242 F.3d 121, 242 F.3d 121 (3d Cir. 2001), holding that court appointed experts are immune to malpractice claims by the parties to a case. Wyoming reached the same holding in Riemers v. O'Halloran, 2004 N.D. 79, 678 N.W.2d 547, 2004 ND 79 (N.D. 2004). Wyoming held that attoneys can be sued for negligence in retaining experts - Rino v. Mead, 2002 WY 144, 55 P.3d 13 (Wyo. 2002).]

This case explores the liability for expert witness negligence.  The plaintiff, who was suing a lender on a failed business deal, hired an expert to determine "the damages sustained because of the lenders' failure to close under the mortgage commitments; prepare a signed report outlining what was done, stating the conclusions and supporting them; and participate in pre‑ trial conferences, depositions and trial."  This proposed agreement was put in writing and the expert accepted it.  The expert hired a third party to do the calculations themselves, and presented them at trial.   During cross‑examination, the defense found an error in the calculations, which the expert could not correct because he had not done the original calculations himself.  This so undermined the expert's testimony that the defense successfully moved to have it stricken from the record.  This left the plaintiff in an untenable situation and it was forced to settle for much less than the provable losses.  Plaintiff then sued the expert and his consulting firm for breach of contract and for professional malpractice, claiming the expert had

breached its agreement to furnish expert services in connection with the federal lawsuit by failing to deliver an accurate or workmanlike lost profits computation, and had failed to exercise the degree of care and skill ordinarily exercised by experts in the field of real estate counseling and computation of lost profits in real estate transactions.

The trial court granted summary judgment.  The appeals court affirmed the summary judgment, finding that the doctrine of witness immunity barred the plaintiff's claim against the expert.  The Michigan Supreme Court accepted the case on the issue of whether witness immunity applies to a party's own witnesses. 

The court began with the basis for the witness immunity doctrine, drawn from the United States Supreme Court (Briscoe v. LaHue, 460 U.S. 325 (1983)):

The immunity of parties and witnesses from subsequent damages liability for their testimony in judicial proceedings was well established in English common law. Some American decisions required a showing that the witness' allegedly defamatory statements were relevant to the judicial proceeding, but once this threshold showing had been made, the witness had an absolute privilege. The plaintiff could not recover even if the witness knew the statements were false and made them with malice.

In the words of one 19th‑century Court, in damages suits against witnesses, "the claims of the individual must yield to the dictates of public policy, which requires that the paths which lead to the ascertainment of truth should be left as free and unobstructed as possible." A witness' apprehension of subsequent damages liability might induce two forms of self‑censorship. First, witnesses might be reluctant to come forward to testify. And once a witness is on the stand, his testimony might be distorted by the fear of subsequent liability. Even within the constraints of the witness' oath there may be various ways to give an account or to state an opinion. These alternatives may be more or less detailed and may differ in emphasis and certainty. A witness who knows that he might be forced to defend a subsequent lawsuit, and perhaps to pay damages, might be inclined to shade his testimony in favor of the potential plaintiff, to magnify uncertainties, and thus to deprive the finder of fact of candid, objective, and undistorted evidence. But the truthfinding process is better served if the witness' testimony is submitted to "the crucible of the judicial process so that the factfinder may consider it, after cross‑examination, together with the other evidence in the case to determine where the truth lies.

The lower court based its opinion on a Pennsylvania case, Panitz v. Behrend, 632 A.2d 562 (1993), which involved a witness who changed her testimony before trial when she realized that her prior analysis had been incorrect.  The law firm which retained her refused to pay her bill, and she sued.  The law firm counterclaimed, alleging professional malpractice.  The court found that public policy supported witness immunity in this case. The witness had testified truthfully and accurately, the law firm's claim being that it was dissatisfied with the outcome of the testimony.  The Court found that allowing the party who engaged the witness to sue under these circumstances would encourage experts to shade their testimony toward the side retaining them.

The Court in the instant case distinguished Panitz, finding that this expert had been negligent in the preparation of the testimony and that it would not advance the public's interest in accurate expert testimony to allow this conduct to be sheltered by the witness immunity doctrine.  The Court was careful to limit this ruling, for fear that it would undermine the policy behind witness immunity:

We caution, however, that our holding that the witness immunity doctrine does not preclude claims against an expert witness for professional malpractice has limited application. An expert witness may not be held liable merely because his or her opinion is challenged by another expert or authoritative source. In those circumstances, the judicial process is enhanced by the presentation of different views. Differences of opinion will not suffice to establish liability of an expert witness for professional negligence.

This case should be reviewed by anyone who is serving as an expert witness.  This is an important change in the law in Pennsylvania, and might represent a trend in other states.  Experts should consider redrafting their retainer contracts to bar this type of claim, or to subject it to arbitration.