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Opinion #224. Payment to Non-Expert Witness as a Litigation Expense
Issued by the Professional Ethics Commission
Date Issued: April 15, 2021
Question:
Can a lawyer pay a non-expert witness for time spent testifying at a deposition or a trial, preparing for such testimony, and other related costs?
Short Answer:
A lawyer may advance court costs and litigation expenses without running afoul of the Maine Rules of Professional Conduct, including paying a non–expert witness’s lost wages, expenses, and other costs related to preparing and providing testimony or otherwise assisting counsel, so long as the payment is reasonable and not conditioned on the content of the witness's testimony.
Rules Implicated:
M.R. Prof. Conduct 1.2 Scope of Representation and Allocation of Authority
Between Client and Lawyer
M.R. Prof. Conduct 1.5 Fees
M.R. Prof. Conduct 1.8: Conflict-of-Interest: Current Clients: Specific Rules
M.R. Prof. Conduct 3.4: Fairness to Opposing Party and Counsel
An attorney may advance court costs and litigation expenses, including payment of costs and expenses to a non-expert witness.
Following inquiries from members of the bar about the scope of Maine Rule of Professional Conduct 1.8(e), and specifically its application in the context of payment to a non– expert witness, also referred to as a "fact witness" or "occurrence witness", the Professional Ethics Commission provides the following analysis and clarification about the rule with respect to advancing court costs and litigation expenses. Rule 1.8(e) provides:
A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that: (1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and (2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client. M.R. Prof. Conduct 1.8(e).
This text both allows for traditional billing practices in which an attorney bills a client for costs incurred and advanced by the attorney during the course of the representation while also ensuring that a client with limited financial resources can nonetheless access the legal system in the context of a contingent fee agreement or, in the case of an indigent client, through the attorney paying those costs.¹ Witness–related expenses are just one example of litigation costs that may arise and be addressed through either routine billing or contingent fee arrangements, so long as they are clearly addressed in the fee agreement between the attorney and client before such costs are incurred.
While certain litigation costs and expenses may be paid to non-expert witness, some payments may violate M.R. Prof. Conduct 3.4(b). Rule 3.4(b) states that a lawyer is prohibited from "offer[ing] an inducement to a witness that is prohibited by law." The commentary to the Rule explains:
[I]t is not improper to pay a witness’s expenses or to compensate an expert witness on terms permitted by law. The common law rule in most jurisdictions is that it is improper to pay an occurrence witness any fee (except for expenses and reimbursement for lost wages) for testifying and that it is improper to pay an expert witness a contingent fee. M.R. Prof. Conduct 3.4(b) cmt. 3.
Any payment made by an attorney to a non-expert witness must be for the limited purpose of reimbursing the witness for their time and expenses and must be reasonable.
The American Bar Association Committee on Ethics and Professional Responsibility has addressed the issue of payments to non–expert witnesses and specifically the extent that Model Rule 3.4(b), which is identical to Maine’s Rule 3.4(b), imposes any limitations on such payments. Formal Opinion 96–402, Propriety of Payments to Occurrence Witnesses, begins:
ABA Comm. on Ethics and Professional Responsibility, Formal Op. 96–402 at 1 (Aug. 2, 1996). The purpose of the payment, to reimburse the witness, is critical. As Opinion 96–402 further explains:
As long as it is made clear to the witness that the payment is not being made for the substance or efficacy of the witnesss testimony, and is being made solely for the purpose of compensating the witness for the time the witness has lost in order to give testimony in
¹At the same time, as the comments to the rule make clear, "[l]awyers may not subsidize lawsuits or administrative proceedings brought on behalf of their clients, including making or guaranteeing loans to their clients for living expenses. " M.R. Prof. Conduct 1.8 cmt. 10.
litigation in which the witness is not a party, the Committee is of the view that such payments do not violate the Model Rules. ² Id. at 2.
The Opinion emphasizes, however, that any such reimbursement payments made must be reasonable. It also notes:
What is a reasonable amount is relatively easy to determine in situations where the witness can demonstrate to the lawyer that [they have\ sustained a direct loss of income because of [their] time away from work––as, for example, loss of hourly wages or professional fees. In situations, however, where the witness has not sustained any direct loss of income in connection with giving, or preparing to give, testimony––as, for example, where the witness is retired or unemployed––the lawyer must determine the reasonable value of the witness’s time based on all relevant circumstances. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 96–402 at 3 (Aug. 2, 1996).
The Commission agrees. In short, payments to non–expert witnesses, if any, should be objectively reasonable and should reflect the witness’s time spent testifying, preparing to testify, or otherwise helping prepare the case, and can include reimbursement of expenses related to those activities.³ Reasonable payments by an attorney to a non-expert witness can include compensation for (1) actual expenses incurred, (2) actual wages lost, and/or (3) the value of time spent by the witness.4
²Reasonable compensation to a non-expert witness can include reimbursement of travel expenses.
³Such payments will typically be disclosed during discovery and lawyers cannot direct a non-expert witness to withhold such information. See M.R. Prof. Conduct 3.4(f) ("A lawyer shall not . . . request a person other than a client to refrain from voluntarily giving relevant information to another party . . . . " ).
4Any dispute regarding whether and how much compensation must be paid to a non–expert witness would be addressed by the court hearing the underlying lawsuit.
