Risk Management

Forensic Consulting: From Immunity to Liability

By Kimberly Wittchow, JD

OMIC Staff Attorney

Digest, Summer 2003

As reimbursements continue to diminish, ophthalmologists are turning to forensic consulting work to bolster their bottom line and add variety to their practice. The Physician Insurers Association of America recently reviewed approximately 18,000 medical malpractice cases and found that the average cost of hiring a defense expert is $5,486. Providing expert services in just five cases a year could boost a physician’s annual income by more than $25,000. With the added income, however, physicians are assuming new responsibilities and additional liability risks. This article tracks the evolution of forensic consulting legal liability and possible disciplinary action by professional associations for violation of their ethical guidelines governing expert witness testimony.

Forensic consulting covers a variety of services, from performing case reviews to conducting independent medical exams (IMEs). Providing expert witness testi- mony, in particular, is becoming increasingly popular. Both federal and state jurisdictions allow qualified expert witnesses to testify if their specialized knowledge will help the trier of fact understand the evidence presented. The use of experts in the U.S. judicial system is extremely common and their influence on the outcome of trials is well accepted.

Not long ago, expert witnesses were considered friends of the court. The purpose of their testimony was to clarify and objectively explain complicated matters to the fact finder, not to assist one party in winning the case. Like lay witnesses, experts had absolute immunity from civil liability for anything they said on the witness stand. This immunity developed in English common law to encourage witnesses to provide complete and unfettered testimony in court without fear of retaliatory lawsuits by parties who were disadvantaged by their testimony. In particular, the courts wanted to shield witnesses from defamation suits filed against them by parties on the opposing side. Sanctions, such as perjury and contempt, were thought to be enough of a deterrent against incompetent, untruthful testimony.

A Tradition of Immunity

American courts followed the English tradition (although some American decisions required a showing that the expert witness statements in question were relevant to the judicial proceeding). Even perjured testimony made in the course of a judicial proceeding could not serve as the basis for a suit in tort. It did not matter if the expert witness was not appointed by the court and received compensation by a party to the action, immunity still applied. Nor was immunity limited to defamation claims. Expert witnesses could not be sued for malpractice, fraud, or libel, either. The cause of action was irrelevant to the application of the privilege. Over time, however, absolute immunity has been replaced in some jurisdictions by qualified immunity, which only protects expert witnesses from defamation claims brought by opponents of the expert’s statements. This may not prove to be much help since defamation actions brought by adverse parties are rare. Instead, parties are increasingly suing their own experts, sometimes called “friendly hired witnesses,” on professional negligence or “expert witness malpractice” theories. Even when the witnesses are court appointed, some courts are now allowing cases to proceed against them.

Customarily, courts have found that the public policy of protecting expert witnesses and allowing them to give open and honest testimony without retaliation is so important that even negligence on the part of the expert will not trump his or her immunity from suit. However, the arguments for liability are mounting. Given the significant additional income a physician can earn by offering expert testimony, unscrupulous physicians may be tempted to distort the truth to benefit the party that retained them. The perception is that many experts are not impartial aids to fact finding, but biased advocates for their clients. The threat of liability, it is argued, will encourage experts to be more careful in providing accurate, reliable testimony.

Furthermore, some courts have opined that the safeguards of cross-examination and the threat of perjury prosecution are ineffective at deterring dishonest or negligent testimony because experts today are so experienced at deflecting attacks on their testimony and because it is nearly impossible to convict experts for their faulty reasoning.

The Argument for Liability

Proponents of expert witness liability argue that professional experts (doctors, lawyers, accountants, engineers) should be held accountable for negligence in litigation-related services just as they are in their primary work. Because these experts can choose whom they work for, and charge accordingly, clients should expect that their experts owe them a duty of care. Granting immunity, it can be argued, is contrary to the intent of tort law, which is to compensate an injured party when the cause of the loss can be attributed to someone else and to prevent such future misconduct. The standard of care applied in other professional negligence cases is applicable to that of expert witnesses: Did the expert exercise the care, skill, and proficiency ordinarily exercised by reasonably prudent experts under similar circumstances?

While much of the focus has been on expert witness testimony, because of the continued availability of immunity in some jurisdictions, actual liability may more likely stem from other forensic consulting services. Allegations of misconduct in the forensic exam, review of claims, filing of reports or other extrajudicial practices may allow plaintiffs to get around the immunity protection afforded experts who take the stand.

Furthermore, negligence actions are not the only liability risk for forensic consultants. Unfair competition or fraudulent representation of expertise may be alleged if, for example, the forensic consultant claims to possess degrees or licensure that he or she does not have.

Breach of confidentiality claims against forensic consultants also may stick. For example, a California court found that, in an IME scenario, an evaluator was performing a professional service and thus had a physician-patient relationship with and duty to the evaluatee. As such, it was inappropriate to disclose certain information to the party who arranged and paid for the IME since the disclosure violated state confidentiality laws.

Ethical Guidelines

In addition to legal liability, forensic consultants may be subject to disciplinary action by their professional association ethics board for rendering false reports or giving dishonest testimony, which may result in their suspension or dismissal from the association, or public censure. The American Academy of Ophthalmology may join several other medical specialty organizations in adopting ethical codes or promulgating guidelines for expert witness testimony in medical malpractice litigation. The Academy’s Board of Trustees has approved an Ethics Committee request to have the Academy membership vote to add the following new rule addressing expert witness testimony to the Academy Code of Ethics. If adopted, this rule will go into effect November 2004:

Expert testimony should be provided in an objective manner using medical knowledge to form expert medical opinions. Nonmedical factors (such as solicitation of business from attorneys, competition with other physicians, and personal bias unrelated to professional expertise) should not bias testimony. It is unethical for a physician to accept compensation that is contingent upon the outcome of litigation. False, deceptive or misleading expert testimony is unethical.

The growing trend among medical specialty societies to address the problem of biased and irresponsible testimony by their members has not gone unchallenged. In one well publicized case, a neurosurgeon sued the American Association of Neurological Surgeons (AANS) claiming it unfairly suspended him for testifying against a fellow association member in a malpractice lawsuit. The suspension came after an AANS hearing panel determined that the surgeon had provided “unprofessional testimony” at the trial because the testimony did not have a “convincing basis in either literature or logic.”

In his lawsuit, the neurosurgeon argued that the AANS violated state law because it suspended him in revenge for having testified as an expert witness against another AANS member in a medical malpractice suit. He claimed the AANS action deprived him of his due process rights and violated the legal rights afforded members of volun- tary associations. He argued that the AANS acted in bad faith because it never disciplines members who testify on behalf of malpractice defendants and that it is against public policy for a professional association to discipline a member on the basis of trial testimony unless the testimony is intentionally false.

The district court dismissed his suit – and the 7th Circuit Court of Appeals upheld the lower court’s decision – because the neurosurgeon was unable to prove that the association’s action substantially impaired an “important economic interest” of his. He continued to practice as a neurosurgeon and still made 35% of his pre-suspension expert witness testimony income. While this was enough to prevent his suit from proceeding, the appellate court also pointed out that, even though all complaints entertained by the AANS had been against plaintiff’s experts, this was not evidence of bad faith because, in the course of a malpractice suit, it is generally plaintiff’s experts who are going to be critical of another member’s care and cause the maligned member to complain.

Professional Self-Regulation or Member Intimidation? The plaintiff’s bar is concerned that medical specialty society codes pertaining to expert witness testimony are an attempt to intimidate members who testify against fellow members. The court in this case disagreed. Because membership in the prestigious society boosts an expert witness’ credibility, “the Association had an interest – the community at large had an interest – in (the neurosurgeon’s) not being able to use his membership to dazzle judges and juries and deflect the close and skeptical scrutiny that shoddy testimony deserves.” Thus, the court opined that professional self-regulation furthers rather than impedes the cause of justice.

An even greater threat to forensic consultants than voluntary association censure is disciplinary action, including loss of licensure, by the consultant’s state licensing board, where witness immunity may not be available to protect the physician.

In order to limit their liability, it is imperative that forensic consultants understand the proper procedures and relevant legal issues and requirements before undertaking such work. Even with the best practices, forensic consultants are never completely immune to liability and should carry insurance that will adequately cover all aspects of their work. The OMIC professional liability insurance policy covers claims based on forensic consultants’ professional services for or on behalf of a formal accreditation, utilization review, or similar professional board or committee of a state licensed health care facility, clinic, or professional society. However, if the insured is hired as an independent consultant or expert witness, the policy only covers claims where an actual (physical) injury is alleged. This would exclude claims by the hiring party in a private lawsuit against the forensic consultant for professional negligence.

To best cover the various risks and liabilities of the full forensic consulting practice, experts in the field suggest that forensic consultants also acquire errors and omissions coverage from a reputable company specializing in this unique exposure.