By Mike Starkey, French Lyon Tang
Compensation of witnesses is primarily governed by California Rules of Professional Conduct (“CRPC”), Rule 5-310. Rule 5-310(B) prohibits payment to a witness that is contingent on the content of the testimony or the outcome of the matter. The rationale is to prevent perjury. But, Rule 5-310(B) expressly permits payment to a witness for reasonable expenses and to compensate for “loss of time in attending or testifying.” Rule 5-310(B) also permits paying a reasonable fee for the professional services of an expert witness.
However, sometimes useful testimony requires significant preparation, which a witness may not be willing to do for free. Neither the CRPC nor caselaw clarify whether it is permissible to pay a non-expert witness for time spent preparing for deposition or trial. Nonetheless, based upon the principles that underlie Rule 5-310, such payments are likely permissible, assuming the amount is reasonable under the circumstances and is not contingent upon the content or outcome. (See California State Bar Formal Opinion No. 1997-149 (“reasonable compensation for preparation time . . . seems no more objectionable in principle than expert witness fees”).)
What if a third party claims to have physical evidence critical to your client’s claim, but demands a payment? It’s an open question under California law. A primary concern is that payment could induce alteration or falsification of evidence to mislead the judge or jury. Rule 5-200(b) prohibits a member from misleading judge or jury “by an artifice or false statement…” (See also Bus. & Prof. Code § 6068(d).) The New York State Bar Association Committee on Professional Ethics has weighed the issue under New York’s rules and opined that paying for physical evidence is permissible, and that such payment may be contingent upon the matter’s outcome, provided that the attorney does not knowingly offer false evidence (or remain willfully blind to tampering). (See Ethics Opinion 997, January 24, 2014). Further, to use the evidence, the attorney will likely need the seller to authenticate it, but cannot use the payment for physical evidence to circumvent the rules’ limitations on payment to witnesses for testimony. (Ibid.) Given that opinion and the policies underlying payment of witnesses, a reasonable payment for physical evidence that was lawfully acquired by the witness, without other indicia of suspicion, would likely be ethical under the CRPC. Nevertheless, since the rule is unsettled
in California, subpoena power would be a more conservative approach in lieu of payment for evidence. In addition to the ethical issues involved, the lawyer should also consider the evidentiary and strategic issues relating to the admissibility, reliability and strength of the evidence.