Written by Tracy L. Coenen, CPA, CFF
Wisconsin Law Journal
One often overlooked key to successfully working with an expert witness is the protection of privilege and work product. Until the expert is actually disclosed to the other side, it’s in the best interest of the client to make sure that the expert’s work is protected.
While no airtight accountant-client privilege exists, it is still possible to protect communications when an accountant (or other expert) is working with an attorney on a litigation matter.
Protecting the work product can provide a huge advantage in the early stages of litigation. It allows the attorney to explore possible assertions and defenses in the case with the help of an expert, yet it doesn’t expose the expert’s opinions and input to scrutiny from opposing counsel.
When you are unsure of the outcome of an expert’s work, it might be very wise to protect that work. You are looking for an expert opinion that helps your case. If your expert is ethical, she or he will tell the truth no matter what that truth is or whether it helps your case. If that opinion is detrimental to the case, the attorney obviously won’t want to use it.
It is not uncommon for other problems to arise with the work of the expert. What if the expert realizes that the subject matter of the case is outside her or his scope of expertise? What if the attorney changes her or his mind about the type of opinion needed? What if the engagement simply doesn’t work out in a way that the expert can provide a proper opinion?
Any qualified, competent, and ethical expert should be willing to be dismissed from the case at the attorney’s discretion, and all work and opinions should be kept strictly confidential. The only exception to this should be a court order requiring the expert to turn over documentation and opinions.
Within the rules of the game, the adverse opinion and the associated work product need to be kept from opposing counsel as a basic part of a litigation strategy. So it’s necessary to use all legal means to make sure that opinion stays private, between the attorney and the expert only. The attorney does not want the other side examining the expert’s notes or file, and certainly doesn’t want any probing into the reason for parting ways.
In order to protect the work product and privilege, it’s important that the expert contract directly with the attorney to provide consulting services. The fees are paid by the attorney, although in almost all cases the attorney will require the client to provide the funds. The engagement agreement is between the attorney and the expert, and the attorney directs all of the work.
Direct communication between the client and the expert outside of the presence of the attorney is discouraged. It’s best to have communications go through the attorney so that you’re assured of maintaining privilege. While direct communication between the client and the expert wouldn’t automatically mean that privilege is waived and the work product is wide open, it’s just not wise to take the risk that such a thing might happen.
I typically stay in close contact with the attorney while evaluating the information and evidence in a case. I often discuss what I’ve found prior to committing my opinions to writing. There are cases in which the attorney decides a written report should not be done. I can respect that decision, and would rather hold off writing a report until the attorney gives the go-ahead, than risk writing a report the attorney doesn’t want.
How would that be an issue if I’m just a consultant to the attorney and all privilege and work product rules apply? Sometimes cases take turns that you don’t expect. There can come a time when communications between the attorney and the consulting expert must be revealed. So even though the attorney didn’t intend for the other side to know about the expert’s work, sometimes it can become an issue. At that point, the less paperwork in the file, often the better.
So in cases where I am a consulting expert and I come to a conclusion that the attorney does not want to use, I often won’t even write a report. I just close my file and our working relationship on that matter is ended.
Expert as Consultant
Prior to being disclosed as a testifying expert, the expert is really consulting on behalf of the attorney, examining information and evidence and advising the attorney in the consultant’s area of expertise. The expert is essentially helping the attorney decide if a relevant and appropriate opinion can be rendered in the case. In other words, the attorney is being given the opportunity to decide if she or he would like the expert to be officially declared an expert in the case, and then render an opinion.
Again, if the expert’s opinion is not helpful to the case, the attorney doesn’t want it and certainly doesn’t want that opinion disclosed to anyone. Does this cause ethical dilemmas for the expert? It should not. As long as the expert gives a factually correct and appropriate opinion, if the attorney decides not to use that opinion (because it’s adverse to the case) it’s not the expert’s problem.
Ethics only become an issue when experts try to craft opinions that help clients. That’s not the work of a good expert. A good expert sticks to the facts and offers up an appropriate opinion that can be supported by the facts of the case and common practices in the expert’s field. A bad expert is wishy-washy, and is willing to change the opinion as necessary and as directed by the attorney.
I’d much rather be an ethical expert who sticks to her guns, regardless of which side of the case it benefits. If the attorney has to discontinue the engagement because my opinion is not helpful to the case, so be it. There will be other engagements around the corner. Besides, what attorney really wants an expert who is willing to lie and manipulate the facts and the opinions? That’s just setting up the expert for trouble when opposing counsel starts delving further into the opinions and the subject matter.
Consulting with an attorney on a matter can provide a tremendous litigation advantage if carried out properly. This is one very effective way for an attorney to evaluate the merits of the case and potential strategic positions to take during litigation, without the risk that the other side will have access to that work.
Of course, once an expert is disclosed during discovery, the work, notes, and opinions of that expert will soon be revealed as a normal part of the litigation process. However, until that disclosure occurs, it makes sense to protect the consulting expert’s work to the fullest extent possible.
Tracy L. Coenen CPA, MBA, CFE is president of Sequence Inc, a forensic accounting firm with offices in Milwaukee and Chicago. Ms. Coenen can be reached at 414.727.2361 or [email protected].