Considerations for Joint Retainers
by Herschel I. Fogelman and Jennifer S. Shuber
We often tell clients that, to a certain extent, family law lawyers are the general contractors of law. We regularly refer our difficult problems to third parties for assistance in resolution or, ultimately, for resolution itself. Parenting issues go to assessors, access issues go to parenting coordinators, income determination to valuators and so on.
While this is an effective and expedient strategy, which usually resolves the issue, the fact is that all too often these referrals are made without specifically formalizing the role of the third party. This is especially true when the referral is made jointly by counsel. The purpose of this brief paper is to remind counsel that sending an issue out the door may not be the end of it and, as such, counsel have to carefully consider a number of factors when retaining an expert.
I recently inherited a file where the parties had jointly retained a business valuator to value a party’s shares in a privately held company. The valuator prepared a report that one party accepted, but the other party rejected. The valuator’s role was unspecified, and as such neither party knew definitively:
A. Whether her work, specifically her working notes and papers, was confidential; B. Whether the parties were bound by her determination; and C. In the event of a trial, whose witness the valuator would be
As a result of the confusion, one of the parties went ahead and retained his own valuator, and the issue of valuation remains outstanding. Both parties will incur double the costs of the process, because counsel at first instance did not particularize the role of the jointly retained valuator.
Rule 6.01(2) of the Rules of Professional Conduct states as follows:
A lawyer shall promptly meet financial obligations in relation to his or her practice, including payment of the deductible under a professional liability insurance policy when properly called upon to do so.
In the context of joint retainers, the commentary on this rule states:
When a lawyer retains a consultant expert, or other professional the lawyer should clarify the terms of the retainer in writing, including specify the fees, the nature of the services to be provided, and the person responsible for payment.
This rule, and the commentary that flows from it, is essentially the formulation of the proper practice to be adopted. Unfortunately, while most lawyers take these steps with their own experts, it seems that they do not adopt the same level of particularity when jointly retaining someone.
The first thing for counsel to consider, when there is a joint retainer, is whether the parties will be bound by the determination of the expert. That satisfies the requirement to clarify the terms of the retainer. This question must be asked, answered and specifically papered in the file. The binding nature of the retainer is of particularly importance, since determinations such as whose witness the expert is flow from that decision.
If the parties are not going to be bound, then the next question is whose witness the expert is. The answer seems to be that the expert is no-one’s witness. Hence, both parties are free to cross-examine him or her at trial.
The logical follow up question is whether the working papers and notes of the expert are compellable at trial and the process for getting them. I think it is good practice if a joint retainer is being engaged without being binding that parties agree that the working papers of the expert may be released and that they direct the expert to that effect in writing from the outset, as part of their retainer agreement.
There is also a question of the fees of the person so engaged. Again, the commentary to Rule 6.01(2) requires that determination to be made. It is easy when retaining your own expert. When there is a joint expert, however, it becomes more complicated. Are the fees to be shared and, if so, in what proportion? If one party is paying all of the fees, is this a credit in the action or not? If it is a credit in the action, what it is a credit against and how is that to be determined?
If the expert jointly retained has residual arbitrative authority which is fairly common with Parenting Co-ordinators, for example, then it must be made clear in the retainer that, as part of the arbitration process, he or she may consider costs which may include the fees paid by the parties. However, if the matter never gets to the arbitration stage, then the apportionment of the expert’s fees needs to be clearly articulated at the outset.
Another essential aspect of the relationship with the jointly retained expert is the process for communication with the expert during the currency of the joint retainer. Can one party speak to the expert alone? Does all communication need to be by conference call or joint meeting? It is intuitive, to the extent there is a joint retainer, that all communication must be communal. However, I am sure in your practice you have encountered many situations where one party or lawyer speaks to the expert alone.
The problem of one or the other lawyer speaking to the jointly retained expert is a particular problem in custody/parenting cases. Counsel for one party is sometimes asked by his or her client to speak to the assessor or PC about an issue or concern. To me, this is a significant problem, which can easily be avoided by specifying the method of communication in the initial retainer letter as follows: Unless specifically agreed all communication with jointly retained experts has to be by way of conference call or joint meeting. Obviously, the reason for prohibiting private conversations with the expert is simple. If the expert was called upon to testify, his or her credibility would be in question if it could be shown that he or she had private conversations with one side or the other. Once these conversations have been revealed to the Court, it would be relatively easy, in my view, to assert a reasonable apprehension of bias with regard to the expert’s findings.
The issue of joint retainers has been canvassed in a few cases. In Bowen , Justice Mesbur concluded that Ms. Linda Brent, who had been jointly retained to value the husband's business interests as well as income, could be cross-examined by both counsel. In that case, both parties had retained their own experts subsequent to the hiring of Ms. Brent. It is unclear what weight the court gave to Ms. Brent or the other experts.
The case of Tsakiris highlights the problems that counsel can encounter where the terms and nature of the retainer are unclear. In that case, the parties could not agree on whether they had or had not reached an agreement to jointly retain an expert for valuation purposes. The issue became subject of a motion, which included, among other relief sought, leave to examine the husband's lawyer regarding whether an agreement had been reached to jointly retain the valuator and, if so, whether the husband had breached the agreement. Justice Brown gave leave to examine the husband's lawyer finding that contradictory statements made by the husband, first in correspondence and later in affidavit form, waived privilege regarding this issue. The reality for the parties in these cases appears to be months of haggling relating to the issue of a joint retainer, and then costly interlocutory proceedings. In hindsight, in that case, the idea of a joint retainer was a minefield the parties ought to have avoided in the first place.
Since expert evidence has become so prevalent in family law cases, counsel must be aware of the pitfalls of jointly retaining such individuals. Although it is wise to want to avoid the perception of hired gun that often accompanies an expert retained by one side or the other, counsel must be careful to be absolutely clear when jointly retaining an expert. The written retainer must contain clear ground rules on all aspects of the work to be done, including whether the expert’s opinion is binding, who will pay the fees, how communication will be effected, whether the parties are free to retain their own experts if there is disagreement with the expert’s findings, whether both parties can cross examine the expert at trial, etc… This may seem like a lot of effort and time to be put in before the expert has even started to do any work. However, given all of the problems inherent in a joint retainer, an hour spent by counsel ensuring the retainer is clearly circumscribed from the outset will save days of work, thousands in fees and lots of aggravation.