Florida Supreme Court

Florida Shields Corporate Employers of Expert Witnesses from Financial Discovery

Written on Thursday, September 5th, 2019 by T.C. Kelly
Filed under: ExpertWitness

After suffering injuries in a bicycle accident, Michael Sode sued the driver who allegedly caused the collision. He was required to undergo a medical examination at the defendant’s request. The  examination was performed by a doctor at the Orthopedic Center of South Florida.

Sode attempted to subpoena the financial records of the Orthopedic Center. The Orthopedic Center moved for a protective order, arguing that Florida law does not permit broad discovery of financial information from expert witnesses. Sode countered that the Orthopedic Center is a corporation that employs experts and is not itself an expert witness.

The trial court granted the motion in part but allowed greater discovery than the Orthopedic Center wanted to provide. The Orthopedic Center appealed to the Florida District Court of Appeals.

Determining the Bias of Expert Witnesses

There is nothing wrong with doctors testifying as retained experts for plaintiffs or for defendants. The legal system depends on honest experts providing honest opinions, regardless of the party that hires them. And since insurance companies have a duty to defend an insured, there is nothing wrong with insurance companies hiring and paying doctors to act as expert witnesses when they provide a defense.

Defense attorneys and insurance companies regularly accuse plaintiffs’ experts of being biased because they work for money. Plaintiffs’ attorneys accuse defense experts of bias for the same reason. In some of those cases, the accusations have substance. In most, they are an attempt to deflect attention from the weakness of a client’s position.

Whether an expert is biased is for the jury to decide. How much a witness is paid to act as an expert is relevant to that decision, although jurors are generally aware that experts do not work for free. To persuade a jury that an expert witness is biased, parties often try to prove that a large share of the expert’s income comes from serving as an expert witness, and that the expert testifies only for plaintiffs or defendants, not for both sides.

Florida Limitations on Financial Discovery from Experts

In Elkins v. Syken, the Florida Supreme Court attempted to balance the need for financial discovery from experts against the expert’s interest in avoiding intrusive inspection of his or her finances. In Elkins, an injured plaintiff wanted to depose the bookkeeper for the orthopedic expert who examined the plaintiff at the request of the defendant’s insurance company.

Plaintiffs are entitled to depose experts hired by insurance companies and to question those experts about their compensation for testifying. When insurance companies hire doctors to examine plaintiffs, the doctors will frequently be asked about the extent to which they earn income by performing examinations at the request of insurers. The court recognized that earning substantial income from insurance companies may be evidence of a doctor’s bias in favor of those companies.

The question is whether plaintiffs’ lawyers are bound by the doctor’s answers, which may be evasive or untruthful. The lawyers in the Elkins case wanted to confirm the number of independent medical examinations the doctor performed, and the doctor’s earnings from those examinations, by subpoenaing financial records.

The Florida Supreme Court largely shut down that line of inquiry by holding that:

it is sufficient for a doctor to be asked to give an approximate estimate for [independent medical examinations] and total patients seen in a year. The figures given need only be an honest estimate, and do not have to be an exact number. We find no sound reason to require disclosure of exact income figures. The doctor should not be required to disclose the amounts of money he or she earns from expert witness work, or disclose their total income.

The court apparently believed that doctors who serve as experts for the insurance defense industry always give truthful and accurate estimates about the number of examinations they perform for insurers. The court also appears to have assumed that substantial earnings for giving expert testimony — the kind of income that might cause jurors to gasp in disbelief — will not cause a doctor to be biased in favor of insurance companies and against plaintiffs. The court held that it is enough for a jury to hear a doctor’s testimony about the percentage of the doctor’s practice (as the doctor best recalls it) that the doctor devotes to working for insurance companies.

The court cited no studies or other evidence to support those beliefs, which are commonly rejected by attorneys for both plaintiffs and defendants. Although most doctors place their professional integrity ahead of their income (particularly if examinations for insurers are only a small part of their practice), both research and experience suggest that bias can be a problem when experts depend on insurers for a substantial part of their income. The court, however, engaged in remarkably little reasoning when it held that information about a doctor’s income provides “little useful information” to the jury.

Rules of Civil Procedure

The court decided Sykes in 1994. In 1996, the court adopted Rule 1.280(b)(5)(A) of the Florida Rules of Civil Procedure. That rule limits discovery of experts to:

  • the expert’s scope of employment in the litigation;
  • the expert’s litigation experience, including the percentage of work performed for plaintiffs and defendants;
  • other cases within “a reasonable time period” in which the expert has testified; and
  • an “approximation” of the portion of time devoted to expert services and to other services, including the percentage of income earned from expert services.

The rule expressly forbids asking experts how much money they make in general and how much money they make from expert services. The expert can be required to produce business or financial records only under “unusual or compelling circumstances.” The Florida rule is considerably more limited than its federal counterpart.

Discovery can always be limited to avoid oppressive or burdensome production of information or to avoid public disclosure of private information. It is reasonable to set limits on the financial records a doctor is required to produce. It is less reasonable, however, to suggest that parties should be required to take an expert’s word for the percentage of a practice that is devoted to the insurance defense industry.

Application of Elkins to Corporate Employers

Sode argued that the limitations of Elkins do not apply to corporate employers of experts. He noted that nine doctors are shareholders in The Orthopedic Center and that five of those nine perform examinations for insurance companies. The doctor who examined Sode acknowledged in a deposition that he had been hired by insurance companies 120 times in the last three years and that he had earned hundreds of thousands of dollars for that work.

Sode agreed that he obtained all the information that Rule 1.280(b)(5) authorized him to receive, but contended that the rule applies to experts, not to their employers. The court held that the reasoning of Elkins— and therefore the limitations of Rule 1.280(b)(5) — should be extended to cover corporate employers of expert witnesses. Otherwise, the court concluded, the protections provided by the rule would be lost when an expert is part of a corporate practice.

Sode apparently had no particular reason to think that the doctor who examined him gave false testimony. The doctor seems to have forthrightly admitted that he earned a significant part of his income from examinations performed for insurance companies. Sode might have been able to demonstrate “unusual or compelling circumstances” if he had evidence that the doctor was misrepresenting the portion of his income that was derived from the insurance defense industry. Since he offered no such evidence, he was required to accept the answer that the witness gave without obtaining financial documents to test its veracity.

Other Florida cases have drawn a distinction when the insurance company is a party to the litigation (when it provided uninsured motorist coverage, for example) and financial information about expert witness payments is requested from the insurance company rather than the expert. Denying discovery, Florida courts have held, would thwart the truth-seeking function of the trial process. It is difficult to understand why the truth-seeking function is not equally thwarted when the same discovery cannot be obtained from an expert who is hired by a non-party insurance company. Florida courts have nevertheless decided that it is important to shield experts, but not parties, from the burden of responding to financial discovery requests.

About T.C. Kelly

Prior to his retirement, T.C. Kelly handled litigation and appeals in state and federal courts across the Midwest. He focused his practice on criminal defense, personal injury, and employment law. He now writes about legal issues for a variety of publications.

About T.C. Kelly

Prior to his retirement, T.C. Kelly handled litigation and appeals in state and federal courts across the Midwest. He focused his practice on criminal defense, personal injury, and employment law. He now writes about legal issues for a variety of publications.