The Florida Supreme Court ruled that fact witnesses can only be paid to assist with cases in certain circumstances, following a firm’s request to recover fees in a breach-of-contract lawsuit.
While Naples law firm Hahn Loeser & Parks claimed it should be reimbursed for paying witnesses to assist with case and discovery preparation, legal consulting company Trial Practices Inc. argued that allowing payments to fact witnesses could be construed as encouraging them to testify in one party’s favor.
The justices considered Florida Bar Rule 4-3.4(b), which governs witness payments, guards against false testimony and says that parties can provide ”reasonable compensation” to a witness. What’s reasonable, according to the court opinion, all depends on the circumstances.
The underlying case centered on a long-running million-dollar dispute between business partners Jack J. Antaramian and David E. Nassif. Antaramian had agreed to a fee-shifting provision with Trial Practices, promising 5 percent of the money recovered. But after a mistrial and subsequent settlement, Trial Practices sued Antaramian for its share.
A jury rendered a defense verdict in 2011, so Antaramian moved for more than $700,000 in fees and costs. Of that, he claimed $236,000 went to seven fact witnesses at professional firms — the majority to Boston-based firm Burns & Levinson, according to the opinion.
Chief Justice Charles T. Canady wrote the opinion, ruling that without detailed information about how the costs were broken down, the case likely didn’t fit any scenario in which it’s OK to pay fact witnesses.
Justices Barbara Pariente, Peggy Quince, Ricky Polston and Alan Lawson agreed, and Justice R. Fred Lewis concurred in the result.
Read the full court opinion:
Counsel to Trial Practices, G. Donovan Conwell Jr. of Conwell Business Law in Tampa, was pleased with the decision as he argued that allowing payments to witnesses would create opportunities for abuse.
“Every fact witness could then be hired by the party with the most money, and the integrity of the judicial system would be comprised,” Conwell said. “The other side had argued that it was OK to hire a fact witness and pay them consultant fees of basically $500 to $600 an hour.”
‘A very fine line’
According to veteran state and federal appellate lawyer Joel S. Perwin in Miami, the court seemed to struggle with its interpretation of the rule.
“You don’t want to provide any kind of financial incentive for the witness to do anything but be objective and to help you out,” Perwin said. “So the court is walking a very fine line in trying to interpret that language and be true to that distinction.”
Litigants can buy fact witnesses’ help with a case, according to the opinion, but only if it’s directly related to a witness preparing for, attending or testifying in court.
“It does not allow a payment for assistance with the case and preparing for discovery and other things that the lawyer does,” Perwin said.
The way Perwin sees it, if it’s not something a fact witness typically does, it shouldn’t be paid for during a case. Litigants can also pay fact witnesses who lose money by showing up or preparing to testify, according to the opinion.
While expert witnesses are typically brought in to break down complicated subject matter to jurors, fact witnesses are called to explain aspects of the case that they saw, heard or experienced in some way.
“A fact witness is really only supposed to tell you, ‘Here’s what happened, here’s what I was involved in,’ ” Perwin said.
The case will return to the trial court for a closer look at the cost breakdown.