• New York’s Expert Discovery Rules Are Antiquated and Hurt My Business

    New York’s Expert Discovery Rules Are Antiquated and Hurt My Business

    There. I said it. This is a self-serving blog post. I differentiate my business as exclusively providing consulting expert services with the main value proposition being non-discoverability of my work product. While that works for federal cases, my pitch is less compelling in New York cases. Besides hurting my business, New York’s expert discovery rules negatively impact almost anyone involved in litigation involving experts.

    In New York, while parties must identify their experts “[u]pon request” and summarize their opinions and qualifications, any other discovery concerning experts “may be obtained only by court order upon a showing of special circumstances,” CPLR 3101(d)(1)(i), (d)(1)(iii).

    This means that in New York the standard tools for taking pretrial discovery from a non-party witness – subpoenas for documents and testimony – are unavailable when it comes to experts.

    Since experts are essentially excluded from pretrial discovery, a party wanting to obtain an expert’s file usually must rely on a trial subpoena – a problematic solution because trials are a poor setting for resolving discovery disputes. Restricting expert discovery to trials also defeats the purpose of the pre-trial Note of Issue, which supposedly confirms that all discovery is complete.

    As every civil litigator knows, expert discovery is a significant part of developing a workable theory of the case, assessing the relative strengths and weaknesses of a client’s position, and preparing for trial. Expert discovery is such an important facet of complex civil litigation that a solid expert report (followed by a capable performance of an expert at a deposition) can have a dramatic impact, transforming a moderately defensible case into one that should be tried. While none of these concepts are new to civil litigators in nearly every state (as well as those who practice in the federal courts), they are nearly a foreign language for attorneys in New York state courts.

    In nearly all jurisdictions, expert discovery is recognized as an important and necessary part of any civil case. Expert discovery in the federal courts is governed by Rule 26(a)(2) of the Federal Rules of Civil Procedure, under which the parties must identify the experts they have retained for the purposes of testifying at trial and disclosing their experts’ reports. An expert’s report must contain a complete statement of all opinions the expert will offer at trial, the basis and reasons for those opinions, the facts or data considered by the expert, any exhibits the expert will use at trial to summarize or support those opinions, the expert’s qualifications (including a list of all publications authored in the last 10 years), a list of all other cases in which the expert has testified under oath during the previous four years, and the compensation that the expert will receive. Preparation of an expert’s report is one of the most important stages of litigation and is crucial to whether the expert’s opinion will be held admissible at trial. Furthermore, the parties are free to depose and cross-examine their adversaries’ experts on the bases of their opinions (thus making an expert vulnerable to impeachment should a new opinion be offered at trial). Finally, in the federal courts, there are few ambiguities as to when expert reports must be served — specific deadlines providing for the disclosure of expert reports and completion of expert depositions are generally discussed and ordered at the initial Rule 16 conference, and are subject to continuing orders by the court depending upon the progression of fact discovery. Accordingly, by the time of a federal trial, there is little “mystery” as to an expert’s opinions.

    In contrast, New York state courts do not permit “expert discovery” as most civil litigators know it, even in complex cases that will primarily hinge on expert testimony. This absence makes New York almost unique among jurisdictions and injects a critical element of uncertainty into nearly all complex civil actions. To be fair, New York courts do not “forbid” expert discovery, but rather severely limit its scope to the point where it would be considered inaccurate to term it “expert” discovery.

    The scope of expert discovery in New York civil actions is governed by CPLR 3101(d), which permits the parties to request any other party “identify each person whom the party expects to call as an expert witness at trial and [] disclose in reasonable detail the subject matter on which each expert is expected to testify, the substance of the facts and opinions on which each expert is expected to testify, the qualifications of each expert witness and a summary of the grounds for each expert’s opinion.” In practice, however, the end result is completely different because a response to a demand pursuant to CPLR 3101(d) is not a true expert report, but merely a “disclosure”, authored by the party’s attorney, containing a brief (and generally vague) summary of the expert’s anticipated opinions to be offered at trial. In many cases, a plaintiff’s expert disclosure is little more than a recitation of the plaintiff’s bill of particulars and yields little useful information as to the opinions the expert will actually offer at trial.

    Furthermore, the CPLR provides no deadlines as to when expert disclosures must be served, and the applicable deadlines vary widely. Finally — and most significantly — under CPLR 3101(d), depositions of experts are simply not allowed; once served with an expert disclosure, any further discovery of an opposing party’s expert may be obtained only by court order, upon a showing of special circumstances. This is the sum total of expert discovery permitted in the Supreme Court of New York.

    Limiting the scope of expert discovery in complex civil actions has two significant adverse effects. First, it curtails the usefulness of pretrial motions to preclude an expert’s testimony at trial — without the benefit of a record as to the expert’s opinions, courts are generally unable to decide such motions. Second, it encourages the parties to defer meaningful settlement discussions, because they have little incentive (or ability) to truly understand and appreciate their adversaries’ theories. This leads to wasted resources, as parties are often forced to litigate and prepare for trial, only to settle on the courthouse steps. In many cases, allowing expert discovery would have fostered an environment where such cases could have been settled well before trial.

    While motions to preclude an expert’s testimony at trial are commonly filed in federal cases, they are rarely filed in New York state courts. Given the limited scope of expert discovery in New York, courts generally have only a sparse record upon ruling on the admissibility of an expert’s opinion which often forces the court to decide the motion upon little more than the various parties’ expert disclosures or to defer a decision on the issue until the parties’ positions have become entrenched and they are committed to trial.

    In jurisdictions allowing broad expert discovery, however, the trial court will have the benefit of a significant record upon ruling on the admissibility of an expert’s proposed opinion. As a result, the trial court is positioned to competently decide the motion.

    Permitting expert discovery also fosters an environment conducive to productive settlement negotiations and helps weed out cases where a party’s claims or defenses lack sufficient expert support. The parties — by virtue of having to consider the complicated technical issues of their claims and defenses which will ultimately require expert testimony at trial — are forced to squarely and honestly confront these issues from the commencement of every case, and to develop a workable theory of their claims or defenses that will fit with the opinions their experts will offer at trial. Knowing from the outset that strong expert support will be needed compels the parties to take a more objective look at their positions, to acknowledge the relative strengths and weaknesses in their cases, which fosters a more open and honest dialogue, thus encouraging settlement efforts. Even when settlement is not possible, courts are better-equipped to decide motions to preclude or limit the testimony of expert witnesses (or dispositive motions), thus allowing them to exercise their gatekeeping functions more effectively, preventing parties with meritless claims or defenses from “running out the clock” in an effort to settle on the courthouse steps on the eve of trial.

    Ultimately, the resolution of complex civil actions necessarily involves expert opinions. The CPLR’s extreme limitation on the scope of expert discovery, however, serves to discourage meaningful settlement discussions while encouraging “trial by ambush”. In contrast, the federal courts and vast majority of states employ no such limitations, and by permitting full expert discovery, avoid these issues. In my opinion, New York State courts would be well-advised (and my business well-served) to permit full expert discovery in all civil actions, effectively aligning New York state courts with the more informed and efficient federal courts and the many other states in which expert discovery is permitted.

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    Carlos A. Abadi

    Carlos is a 30-year veteran international investment banker who pioneered a number of financial products, such as the trading and swapping of emerging markets sovereign loans in the wake of the 1982 Mexican debt crisis, the trading market for derivatives on emerging markets bonds and loans, the first non-dilutive CET1 transaction compliant with Basel III rules, and the first Chapter 11 filing for a Latin American issuer.

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