When is an Expert Report Privileged?

As I’ve noted before, New York state court rules are generally more “pro-plaintiff” than federal court. In New York state court, a subrogating carrier does not have to turn over its expert report to the defense unless there are “special circumstances.” In state court, the subrogating carrier only need provide a short summary of what its expert is expected to testify to, along with a recitation of the expert’s qualifications and experience.

In federal court, the subrogating carrier must furnish a report signed by its expert, along with a detailed recitation of the expert’s qualifications, a list of the expert’s publications authored in the past 10 years, a list of the expert’s deposition and trial testimony over the past 4 years, and a statement as to the expert’s compensation. Federal Rule 26 was recently amended to provide that draft reports authored by an expert need not be disclosed and most communications between the attorney and the expert are protected.

In one of my cases, the expert had sent a report to the carrier prior to me being retained. Defense counsel requested I produce this report. I argued that the report was protected as “work product” prepared in anticipation that a subrogation lawsuit would be filed. Unfortunately, I lost. The judge concluded that when the report was prepared and sent to the carrier, the carrier was still in “investigation” mode and had not determined that a subrogation lawsuit would be filed. The relevant caselaw noted that all insurance companies conduct “investigations” of claims that are filed, and work product protection does not apply until after the point that the insurance company has made a decision to sue someone. Until that decision is made:

an investigation into the potential for subrogation is simply part of an insurer's ordinary practice of investigating all issues arising from an accident involving its insureds, and documents created as part of this process would have been created in the same form regardless of the insurer's eventual decision as to litigation.”  [1]

Whether or not an attorney has been retained is a factor the courts consider, but is not the only factor. For example, one court ruled that an expert report that was prepared after counsel was hired was not privileged because at the time the report was prepared the insurance company was still investigating the claim and had not decided to file a lawsuit.

In my case, the report was sent to an outside adjuster, who then sent it to the insurance company. Upon receipt by the insurance company’s claim representative, the matter was then turned over to the company’s subrogation department. Had the matter been referred to the subrogation department before the report was written, then arguably the report would be protected because it would have been prepared exclusively for the purpose of pursuing subrogation.

Bottom Line: Where possible, don’t have your expert write a report and send it to the claims department. The expert can orally report his or her findings to the claims department, but any claims file notes will likely not be privileged and will have to be turned over (so be careful what you say in your claims file notes). Ideally, an expert should not draft a report until after: (a) the matter has been referred to subrogation; and/or (b) counsel has been retained. An expert report which is sent directly to the attorney will almost always be considered privileged work product. A report sent to a subrogation department exclusively for the purpose of pursuing a subrogation lawsuit will most likely be protected. At the very least, an early report by an expert should state on its cover that it is “preliminary” and should state that the conclusions contained in the report might change upon receipt of further information.

[1] Selective Ins. Co. of Am. v. Swarey, USDC–WDNY Civ. Action No.: 07-CV-6324, 2011 WL 240750 (W.D.N.Y. Jan. 24, 2011)

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