F-21: Contingency Fees

 Statement of the Case: Engineer A, a civil engineer specializing in road design, was hired by
Lawyer B to assist as an expert witness in a lawsuit. Lawyer B’s client was suing the
municipality for an automobile accident which resulted in injuries. The injured client claimed
that the intersection where the accident occurred was unsafe because of the municipality’s
negligent design. Engineer A examined the intersection and told Lawyer B that he thought the
design might indeed be a contributing cause in the accident. Lawyer B then explained that the
client had no money, that Lawyer B was representing the client on a contingency basis, and
asked Engineer A to prepare a report and appear in court on a contingency basis. Engineer A
estimated that his fee should be $10,000, but because of the risk involved, he would want
$12,000 if the client won the case. (Of course, he would get nothing if the client lost.) Lawyer B
and the client agreed with this arrangement, and engaged Engineer A on the $12,000 contingency basis.

Question: Is it ethically appropriate for Engineer A to appear as an expert witness on a
contingency basis?

Outcome: When the case went to court, the lawyer for the municipality asked if Engineer A was employed on a contingency basis. The judge allowed this question, since it was relevant to

Engineer A’s credibility. When Engineer A admitted that he was indeed being paid on a

contingency basis, the municipality’s lawyer stated that this arrangement created a conflict of

interest and asked that Engineer A be disqualified as an impartial expert witness. The judge

permitted Engineer A to testify, but agreed with the municipality’s lawyer that the credibility of the testimony was tainted. In the end, the judge’s decision was in favour of the municipality and against Lawyer B. Accordingly, Engineer A received no fee for the time spent on the analysis of the site, the report, or the court appearance.

Authors’ Comments: A lawyer may accept a contingency fee for representing a client because

in court, the lawyer is the advocate for the client. If the lawyer has a strong belief in the validity of the client’s case (as we would hope is true), then it is permissible to base the fee on the outcome. However, an engineer or geoscientist appearing in court as an expert witness is

required to be impartial and must not be an advocate for either side. Although either side may

hire and pay an expert witness, an expert witness is responsible to the court, not to the client.

Therefore, an engineer or geoscientist must not accept an assignment on a contingency basis

when acting as an expert witness, or in any position that requires impartiality. These cases occur frequently; other examples are preparing an engineering evaluation for a permit application, for selling a business, or for obtaining a contract. In these cases, the expert must be impartial; any interest in the outcome might tend to influence recommendations or suppress unfavourable facts.

Even if the expert could make impartial decisions, others would still perceive a conflict of

interest.

In summary, Engineer A acted unethically in accepting this assignment on a contingency basis. Engineer A should have insisted on the smaller $10,000 fee, regardless of the outcome of the case.