Subrogation & Recovery Law Blog : Insurance Subrogation Lawyer & Attorney : Cozen O'Connor Law Firm : Property Damage & Insurance Commentary

In a case of first impression, the Pennsylvania Superior Court adopted the "bright line" rule, followed by a majority of jurisdictions, that all information considered by a testifying expert, including information typically protected under the attorney work-product privilege, is discoverable.In Barrick v Holy Spirit Hospital, No. 1856 MDA 2009 (Pa. Super. Sept.16, 2010), the court embraced the notion that once information is considered by an expert, it is fair grounds for full discovery and cannot be shielded.

In Barrick, a plaintiff sought discovery of letters and emails between the defendant's testifying expert and counsel that included trial strategies and tactics. Plaintiff Barrick was injured when a chair collapsed in the defendant's cafeteria. The plaintiff was treated by Dr. Green who was designated to testify as the defendant's expert. The plaintiff subpoenaed Dr. Green's records, but were furnished the treatment records only. The defendant refused to produce emails and letters exchanged between counsel and Dr. Green that included counsel's views concerning the expert's onions. The trial court ordered the production of all records, including communications between counsel and Dr. Green.

On appeal, the defendant argued that discovery permitted under the Pennsylvania rules does not include disclosure of mental impressions of a party's attorney or his or her conclusions, opinions, memoranda, notes or summaries, legal research or legal theories. Judge Olson, writing for the Superior Court majority, noted that the work product privilege protects certain disclosures, but that the privilege is not sacrosanct and may yield if the information sought becomes relevant to an issue in a lawsuit [page 12]. Judge Olson also noted that the permissible scope of expert discovery is broad and may conflict with other discovery rules. In reconciling the conflict, the court ruled "that if an expert witness is being called to advance a party's case-in-chief, the expert's opinion and testimony may be impacted by correspondence and communications with the party's counsel; therefore, the attorney's work-product doctrine must yield to discovery of those communications". [page 10] Judge Olson reasoned that a party is entitled to discover the extent of a lawyer's influence over an expert's opinions, to test the weight and veracity of the expert's conclusions, and to determine "whether counsel directed [the expert] to reach certain conclusions or to disregard certain facts or take other facts into consideration" [page 13]

While this ruling is consistent with extant federal case law [See e.g., Galvin v. Pepe, No. 09-cv-104, 2010 WL 3092640 (D.N.H. Aug. 5, 2010)], proposed amendments to FRCP Rule 26 would require production only of “facts or data” considered by a testifying expert. But the amendments would continue to allow discovery of communications between a lawyer and a testifying expert about: (1) the compensation for the expert’s study or testimony, (2) the facts or data provided by the lawyer that the expert considered in forming opinions, and (3) the assumptions provided by the lawyer that the expert relied upon to form an opinion. These amendments are scheduled to go into effect December 1, 2010.

This decision underscores the importance of managing information sent to any testifying expert. Many courts will continue to apply the "bright line" test, even if privileged documents are inadvertently disclosed to the expert [see e.g., MVB Mortgage Corp. v. Federal Deposit Insurance Corp., No. 08-771, 2010 WL 582641 (S.D. Ohio Feb. 11, 2010), where the court concluded that “once an expert sees information, even if it is the product of an inadvertent disclosure of something otherwise privileged, that information becomes part of the expert’s mental database, and the opposing party is entitled to test how, if at all, knowing that information may have influenced the expert’s opinion."] Subrogation practitioners should also consider that many states do not have rules that follow the amended federal rules, so the "bright line" test will likely remain in force and apply to all information sent to the expert.

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On December 1, 2010, Federal Rule of Civil Procedure 26 will be amended to exempt draft expert reports and certain categories of attorney/expert communication from discovery. In practice, this amendment will liberalize the communications your attorney can have with your testifying expert and reduce expenses that are incurred to comply with the Rule as it is currently written.

Current Rule
Under the current version of Rule 26, along with a written expert report a party must disclose “the data or other information considered by the witness in forming [his opinions]”. That “other information” would essentially be everything the expert read, looked at, or wrote down. Practically speaking, parties go to great lengths to conduct phone conferences with their testifying experts so nothing will be put in writing. In many cases a party will hire separate “consulting only” experts to assist in development of case theories. As written, the Rule has become a situation of form over substance.

Amended Rule
The amendment to Rule 26 requires that only the “facts and data considered by the witness” is discoverable. The Rules Committee has specifically stated that a primary purpose of the amendment is to extend the work-product privilege to draft expert reports. It will also allow for more natural communication between attorney and expert.[1] Under the amended rule, an attorney and expert will be able to speak and email much more freely about the development of the case and craft a report that truly captures the substance of the expert’s opinions.

In Subrogation Practice
In a subrogation case, experts are widely used. Expert reports are often prepared early on so the handling adjuster has something in writing for the file. Under the current Rule, the problem with the pre-litigation expert report is that as new or additional facts are developed through discovery, the report becomes obsolete or even incorrect. It is always challenging to receive a case with good subrogation potential but a poor expert report. You are forced to either hire a new expert (who likely will not have the benefit of firsthand information gathered when the loss was fresh) or produce the damaging report. Discovery of the early draft provides an opportunity for opposing counsel to impugn the credibility of your expert in deposition or trial. The Rule as amended can add value to an otherwise strong subrogation case, as well as save expenses by not having to jump through hoops to comply with the Rule as it is currently written.

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“Dangerous and generally a fruitless occupation.”- Justice Akenhead

No, Justice Akenhead was not talking about being a lawyer, but stating that it is inappropriate to rank possible causes of a fire in terms of probability in order to select the most probable. 

In Fosse Motor Engineers Ltd v Conde Nast (2008), Fosse, the owner of a warehouse, asserted negligence against its tenant and an employment agency that supplied workers in the building for that tenant. A fire occurred at the warehouse when only the workers and a security guard were present. Expert evidence could not identify which of several possible causes led to the fire. The possible causes were: a cigarette discarded by either Fosse’s employees or the agency workers; an electrical fault; or arson by an intruder. Fosse claimed the fire was caused by one of the agency workers carelessly discarding a cigarette or, if it was an intruder, because a door had been left open by the agency workers allowing the intruder access.

The Judge held that although the Court might eliminate all but one of the causes of the fire, it still had to decide that the remaining cause was the most probable. The judge accepted the evidence of the agency workers that the fire was not caused by their actions and discounted the electrical cause as being improbable. That left either someone working earlier or an intruder (entering before the agency workers). The Judge found that as it was not possible, on the balance of probabilities, to determine which of the two remaining feasible scenarios was the cause, Fosse had failed to prove its case.

What’s all the Fosse about?

Fosse provides a reminder that in England & Wales the burden rests upon the claimant to overcome the evidential burden. In some respects the fact that the Judge did not choose to decide between (what he regarded as) the remaining feasible causes was academic since, in either scenario, Fosse would not have been successful. However, the fact that the Judge chose not to decide may be useful in defending claims where the exact circumstances that gave rise to the allegation are unclear: It is therefore always worthwhile looking into causation issues with a critical eye. 

In Drake v Harbour (2008), the lack of proof of an exact cause did not prevent recovery. The claimant engaged the defendant electrician to rewire her home. She was away from the property during the work when a fire started in the loft where Harbour had been working. The Court of Appeal held that the fact that the claimant was unable to demonstrate the precise mechanism that led to the fire was not a bar to recovery; if a claimant proved that a defendant was negligent and a loss was caused that was of a kind likely to have resulted from such negligence, that would ordinarily be enough to infer that it was probably so caused. Further, as Harbour was suggesting that it was not his negligence that caused the fire, then it was his burden to suggest what the probable cause was, and to properly plead it.

Harbouring doubts?

Drake suggests that where negligence can be established you do not necessarily have to show the precise mechanism as an English Court might infer that it was the defendant's negligence that caused the loss; the onus then shifting to the defendant to prove that alternative causes are at least “as likely”.

Causation considerations
These two cases highlight the importance of considering the cogency of the factual (and expert) evidence in proceedings. Drake suggests that even if you don't know the precise mechanism, if you can show that the likely causes all would have emanated from the negligence of a specified person, that suffices. If an English Court can be satisfied that a party was negligent it may not always be necessary to show the most likely cause. In Fosse, though, because the causes may have had different culprits, and because negligence could not necessarily be shown, the causation hurdle could not be overcome.

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