So, just how much do you earn, anyway?

Lawyers deposing experts often delve into matters pertaining to the witnesses' compensation. Indeed, FRCP 26(a)(2)(B)(vi) contemplates that an expert's report must contain "a statement of the compensation to be paid for the study and testimony in the case". However, at what point will questions probing the amount of income that an expert earns be considered intrusive and not relevant? While the federal courts often allow litigants liberal discovery of expert credentials, most courts now limit the scope of the inquiry when litigants overreach to learn details about the extent of an experts' earnings outside the matter where he/she is testifying. In Young v. Pleasant Valley School, No. 3:07-CV-854 (M.D.Pa. Aug. 18, 2011), Chief Judge Yvette Kane ruled that absent a showing of relevance or necessity, the request of annual income information from an expert is "overkill" and not discoverable. Id. at 4. Plaintiffs filed this civil rights action based on claims that the minor plaintiff's high school teacher promoted a hostile classroom environment by showing explicit photos and directing student to read sexually graphic books. The defense retained Dr. Edward Dragan from the Educational Management Consulting firm to opine that the school district acted appropriately in reviewing the allegations, disciplining the teacher and monitoring the class to make certain potentially offensive materials were removed. Dr. Dragan was presented for a videotape deposition and during a voir dire of his credentials was asked: " How much income did you achieve in the last year on . . .providing expert testimony, what's your income?" Id. at 1. Dr. Dragan refused to answer, and claimed the information was personal. Id. at 2. On the eve of trial, the plaintiff's sought to exclude his testimony as a sanction contending that the plaintiffs have a right to all information showing the expert's bias and interest.

The court disagreed noting that this broad question was needlessly intrusive and lacked relevance. Chief Judge Kane noted that pertinent compensation information was previously disclosed, including the amount of Dr. Dragan's compensation for testifying in the matter, the cases in which Dr. Dragan testified over a seven year period, and the allocation of matters for which he testified on behalf of a plaintiff or defendant. The court referenced a line of cases from district courts in Maryland, Tennessee, California and Indiana holding that income an expert earns is not discoverable absent a showing that other information furnished is insufficient or that the financial information is otherwise probative.

As a practice tip, there may be instances where the amount of income of an expert may be discoverable. One such instance may be where an expert testifies exclusively on behalf of a plaintiff or defendant. In Young, Chief Judge Kane commented that Dr. Dragan testified equally on behalf of plaintiffs and defendants, so there was no showing that he had an economic incentive to show a bias toward either party in any particular case. If a party can show that an expert depends upon one party to earn his income, there may be grounds to seek discovery of an expert's income. Similarly, discovery may be permitted if there a showing that an expert has become a "professional witness" , demonstrated by a "significant pattern of compensation that would support a reasonable inference that the witness might color, shade, or slant his testimony in light of the substantial financial incentives" Cooper v. Schoffstall, 588 PA 505, 905 A.2d. 482, 495 9PA 2006). However, even with a proper showing, the court may still require a showing of why less intrusive financial information would not suffice to demonstrate the bias of a witness. Behler v. Hanlon, 199 FRD 533, 561-62 (D.Md. 2001).
 

England and Wales move one step closer to introducing contingency fees

On 29 March 2011, following a period of consultation, the government announced that the civil cost reforms proposed by Lord Justice Jackson in his January 2010 report will be implemented in full.

In his report, which followed a year-long review of rising civil litigation costs in England and Wales, Jackson proposed, amongst other things, that the recoverability of success fees and associated costs through ‘no win, no fee’ conditional fee arrangements be scrapped and replaced by (currently unlawful) contingency fees.

Justice Secretary Ken Clarke has now confirmed that Jackson's reforms will be fully implemented, marking the first major overhaul to litigation funding arrangements in the UK in 15 years.  For the first time, lawyers will be permitted to take their fees from their clients' damages.

The use of such contingency fee arrangements, whereby the lawyer takes a percentage of the monies recovered for its client as fees, has to date remained unlawful in England & Wales. Based on the ancient rule of champerty, the thinking has always been that lawyers with a significant financial stake in the outcome of a case might lose their ability to give impartial advice.

With conditional fee arrangements and the after the event insurance regime set to go, contingency fees are now considered by the Ministry of Justice to be the acceptable means by which to “promote access to justice at proportionate cost”. However, Jackson has suggested that contingency fee arrangements require proper regulation and should not be valid unless the client has received independent legal advice. He has further recommended that there be a set maximum percentage of damages that can be recovered in fees from the amount awarded, however he gave no indication of what that percentage should be in commercial cases.

The introduction of contingency fees will constitute a substantial change to the litigation landscape and has sparked controversy in some areas of litigation in England & Wales. However, the ability to offer them will increase the options available for commercial clients seeking more creative fee arrangements and will also allow the risk of litigation to be shared by clients with their lawyers.

When the contingency fee arrangements are implemented in England, Cozen O’Connor’s London subrogation team will be able to combine its expertise with that of litigators in other jurisdictions which allow for contingency fees and where Cozen clients have pending claims (including Italy, Spain and Germany) under a single contingent fee structure.

We await the draft primary legislation and guidance needed to bring the government’s proposals into being, which are expected next year.
 

Limitation Periods for Property Damage Losses in Canada

What is a Limitation Period?

All legal proceedings, including subrogated recovery actions, must be commenced within a certain period of time set out by legislation. The time period in which an action can be brought is called a limitation period. It is also sometimes called a prescription period. If an action is not brought within the applicable limitation period, the claim will be forever lost. Even the most meritorious subrogated claim will disappear because of the expiry of a limitation period.

What is the Purpose of a Limitation Period?

The essential purpose of a limitation period is to place a reasonable limit on the amount of time which a party may take to commence an action. This serves a number of important purposes:

• It creates an incentive for plaintiffs to bring their lawsuits in a timely fashion.
• It defines a period of time in which a defendant can know with certainty that it will be free of ancient obligations.
• It prevents plaintiffs from bringing old claims in which evidence has been lost by the passage of time

When Does a Limitation Period Start to Run?

Each province has different rules about when a limitation period begins to run. For example, in some provinces, time will start to run as soon as the facts which give rise to the claim take place. In other cases, the limitation period may not begin to run until the plaintiff discovers that he or she has been wronged. In some cases, a limitation period may temporarily stop running while parties are attempting to reach a settlement agreement. A party’s conduct may also affect the running of a limitation period. Additionally, where a plaintiff is a minor or under a disability, the limitation period may not start to run until after that person reaches the age of majority or is represented by a litigation guardian.
 

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Reading the Riot Act: Period for lodging claims with the Police for losses caused by the London riots extended to 42 days

In his address to Parliament today, David Cameron announced that those suffering losses as a result of the recent outbreaks of violence, destruction and looting in London and other cities across England will have 42 days, rather than the 14 days prescribed by statute, to claim compensation from the relevant police authorities.

Under the Riot (Damages) Act 1886, those with losses arising from "people riotously and tumultuously assembled" are entitled to lodge a claim with the relevant police authority for their losses, regardless of whether there has been any negligence on the police’s part. However, under the Act, such claims must be submitted "within fourteen clear days after the day when such injury, stealing, or destruction took place", otherwise the right to bring a claim against the police will be lost.

Given that many of the properties, businesses and residences involved remain crime scenes and/or structurally unsafe, assessing the damages and submitting a claim in such a short period of time would have presented huge challenges. That being so, the Association of British Insurers (ABI) called on the Home Secretary, Theresa May, for the 14-day period to be extended to 42 days. Those calls were answered in the House of Commons this morning when, shortly before midday David Cameron confirmed that the Government had extended the time period for bringing a claim to 42 days.

However, the announcement will come as a blow to the Association of Police Authorities (APA), who now face the prospect that an even larger percentage of the estimated £200 million costs arising out of the recent chaos will land at their feet.

Although it is anticipated that insurers will cover most of these losses, the Act expressly recognises an insurer’s right to a statutory recovery in respect of payments made to its Insureds as a result of riots (section 2 (2) of the Act). The Act also provides a route to compensation for uninsured individuals and businesses.

It is important to note, however, that claims under the Act are limited. An insurer will be able to claim for loss or damage to domestic and business premises, as well as property within them, but claims for business interruption or other consequential losses are excluded.

While the Prime Minister’s announcement today equates to a relaxing of the legislation in favour of claimants, by way of contrast, the police authorities have renewed their calls for the Victorian legislation to be repealed. This is not surprising considering the bill they face. Indeed, the 125 year-old Act has long been considered arcane (ten years ago - in April 2002 - a House of Commons Home Affairs Committee Report considered calls by the APA for its repeal.  However, even if the Act were swiftly repealed, it is unlikely that the repeal would have retrospective effect, so Insurers are likely to be safe for now (but may need to review the cover they provide in the future).

As for the affected police authorities' own cover? The APA has claimed that authorities were unable to access affordable insurance to cover the recent level of damage. This lack of adequate cover is almost certainly a knock-on effect from the case of Yarl's Wood Immigration Ltd v Bedfordshire Police Authority [2009]. Here, whilst the Bedfordshire Police Authority were found to be responsible under the Act for picking up the £42 million cost of the 2002 disturbance, they were able to pass these costs to their insurers. Given the same level of cover does not appear to exist today, the police may need to meet the damages from their own reserves (or a special Home Office grant). These reserves may not be sufficient: their 2010/11 accounts showed that in March the reserve, funded by the taxpayer, was only £70.6 million.

Finally, an important point to note for those lodging claims against the police: under paragraph 11 of the Statutory Instrument 1921/1536, which deals with the procedural requirements when making a claim "No costs will be allowed to any claimant". As such, claimants will need to bear their own costs in bringing a claim.
 

Honeywell Thermostats Recalled

 On July 28, 2011, the Consumer Product Safety Commission (CPSC) and Honeywell International Inc. collectively issued a voluntary recall of 77,000 Honeywell baseboard and fan heater thermostats sold between January 2000 and December 2007. There have been 16 reported incidents of the thermostats melting and smoking as a result of overheating. While there have been no reported injuries thus far, the product is considered to be a fire and burn hazard to consumers. This is not the first recall of its kind, nor the first recall for Honeywell. Just last October, CPSC recalled control panel fire alarms manufactured by a Honeywell subsidiary, Fire-Lite Alarms. Honeywell, however, is not the only company haunted by such issues with these devices. The Consumer Product Safety Commission announced a recall of Comverge, Inc. brand thermostats back in June 2010 when 13 reported incidents of overheating prompted CPSC to deem the product a safety and fire hazard to consumers. Due to such dangerous potential results of usage, CPSC is taking the necessary precautions to ensure the safety of consumers.

The recently recalled thermostats vary in size, but all feature “Honeywell” or “Cadet” written on the outside of the white, rectangular base. Inside the base, each thermostat has an identifiable model number and 4-digit date code, with the recalled thermostats containing the model numbers listed below as well as date codes beginning with 00, 01, 02, 03, 04, 05 and 06. Consumers with a recalled thermostat should immediately set the thermostat to 45 degrees or switch to “off”, a feature only available on thermostats with a letter “B” featured in the model number. 

Failure To Warn: Read The Fine Print

When someone is injured or property is destroyed because a manufacturer did not warn about known dangers you may think your case is a slam dunk. But before you start your victory dance, make sure you can prove that the warning would have been read. Recently, the California Court of Appeal for the Fifth District overturned a jury verdict in excess of $12 million because the plaintiffs did not prove that the failure to warn caused their injuries.   Huitt v. Southern California Gas Company (2010) 188 Cal.App.4th 1586.   In Huitt, two plumbers were injured in a gas explosion due to a phenomenon called "odor fade" whereby the odorant added to natural gas was absorbed into new piping. Without the odorant the plumbers were unaware of the presence of natural gas. The plaintiffs argued that the gas company had a duty to warn that new pipes absorb the odorant. 

The appellate court found that even if the gas company had issued a warning, there was no evidence that the plumbers would have become aware of the warning. The court distinguished this case from those dealing with products such as cigarettes, where a warning can be placed directly on the product. In contrast, natural gas cannot be seen and has no packaging. The court found that the plaintiffs did not prove how the gas company could have delivered an effective warning. Examples offered at trial were a notice included in the customers' bill or a posting on the company website. However, in these hypotheticals there is no evidence that the plumbers would have received the warnings.   The court reasoned that even if there had been a warning there is no evidence that the accident would have been avoided. Therefore, it does not make sense that a lack of warning caused the plaintiffs' injuries. The court ultimately held that recovery was precluded because the plaintiffs failed to establish that a timely warning issued by the gas company would have prevented the accident. 

In conclusion, it is not enough to prove that the manufacturer knew of a dangerous condition and did not warn of it. A plaintiff must also prove that the lack of warning actually caused the harm.