Ethics and the expert witness

Ethics and the expert witness

Hannoch, Franklin Jr

Strict adherence to a code of ethics and the standards of professional practice that it embraces is largely in the mind of the “professional.” In other words, it is mostly a matter of self-discipline. One need only look at the canons or standards themselves to see their relationship to accepting assignments, contingent fees, sharing information, conflicts of interest, etc. There are exceptions to this personal integrity concept, such as advertising, but by far the most public involves appearing in the courtroom as an expert witness. Unlawful, unethical or improper behavior can go unnoticed, but not when one is in the witness chair or seated at counsel table.

The Appraisal Institute (formerly the American Institute of Real Estate Appraisers), recognized that ethics were on display in the courtroom, when they developed their program of “Appraisal Review.” The program required that in all litigated matters where members were on opposite sides, a report showing divergency had to be filed and reviewed for advocacy, incompetency or other manifestations of unacceptable, ethical behavior. This procedure was eventually discontinued, but it does emphasize the importance attached to a public display of inappropriate conduct. Such conduct not only reflects on the moral behavior of the expert witness, but also on the professional organization whose ethics and standards he or she swears to uphold. This, of course, should not imply that concealed misconduct is acceptable or that appraisals made for other than litigation can reflect advocacy, but emphasizes instead the importance of competent courtroom performance. The ethical conduct of an expert witness before a courtroom full of interested parties, other expert witnesses, attorneys, and perhaps the media is exemplified in many ways. Some are obvious and some are subtle, apparent only to the experienced judge or well-trained litigator.

In most courtroom situations, the expert witness is expected to be objective and unbiased–a friend of the court, so to speak. Therefore, the expert who sits at the counsel table passing notes to or whispering in the ear of the attorney gives at least the appearance of advocacy. This form of unethical conduct is equally damaging before or after providing testimony, especially if a jury is present. Certain courts invite the expert to sit at counsel table when the judge is hearing a case without a jury, especially in litigation that involves an area where the attorneys themselves lack experience. The preferred procedure, however, is to confer with counsel during recess or before and after the court is in session. Nothing, however, beats good preparation well in advance of trial. There is a big difference between thoroughness and advocacy. If one is to testify about or prepare cross-examination on comparable data, no stone should be left unturned in the research process.

Another example of advocacy in valuation testimony relates to the selection of the appropriate method or approach. “The Uniform Standards of Professional Appraisal Practice” require the implementation of three approaches, except under certain conditions such as forcing a method that does not apply. Abuse of the exception rule represents advocacy when not justified. Calling a property “special purpose” and valuing it only by summation when comparable sale and income data are available, suggest that the witness is “reaching” for a high value to sustain an assessment or receive a high award in condemnation.

The expression of bias from the witness chair does not always relate to value in real estate related matters, but money is usually involved. A witness whose livelihood is related to his testimony, such as an accountant with a single client, or an attorney who handles only closings, can be slanted in one direction depending on the nature of the case.

The opposite extreme for the witness who assists at counsel table is the trial in which the witnesses are sequestered. This is the exception to the normal proceeding, and usually occurs when the litigation involves fraud or some other criminal act where real estate is concerned, such as bribery or extortion. Under these circumstances, it is only the demeanor of the witness on the stand that will reflect on ethics as compared to others who may give contradictory testimony.

A more subtle ethical violation on the witness stand relates to giving testimony on a subject which is beyond the scope of the witness’ competency, knowledge or experience. This can occur in either direct or cross-examination and, perhaps, both. When the expert lacks the knowledge or experience to handle a share of the assignment, he or she must either gain that knowledge by study and research, or affiliate with someone who enjoys the necessary qualifications and credentials. As an example, if an appraiser seeks to estimate functional obsolescence as the difference between reproduction cost of the subject and replacement cost of a building with like utility, it may be necessary to engage an architect to create and specify the latter.

The most obvious courtroom display of unethical behavior relates to the contingent fee. The courts have long held that a real estate witness whose fee is tied to a result–be it value or otherwise–cannot be objective and, therefore, his or her testimony can be given little weight. Attempts at deception in this area, if uncovered, make the “cheese more binding.” “What is the basis of your compensation?”, the witness is asked. “I am on a salary.”, is the reply. “Are you engaged directly by the client, or is the contract with a company?”, is the following query. “A company.”, is the answer. “How is the company paid?”, the voir dire continues. “The company is on a contingency.”, is the reply. “Who owns the company?”, the lawyer asks.

When it turns out that the witness is the sole owner of the company, credibility is destroyed. The witness not only brings down himself and his client in the eyes of the court, but reflects dishonor on the professional society represented by his or her designation. The real estate professional should be ever mindful that unethical behavior in the courtroom reflects not only on himself but also on the profession of which he or she is a part.

Franklin Hannoch, Jr., CRE, MAI, is 1994 president of The Counselors of Real Estate. He has served both The Counselors of Real Estate and the Appraisal Institute as national chairman of the committees on Ethics and Standards of Professional Practice.

Copyright American Society of Real Estate Counselors Dec 1994

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