Rule 26 amendments may contain traps for the unwary

BVWireIssue #99-3
December 15, 2010

We first reported the proposed amendments to Rule 26 of the Federal Rules of Civil Procedure back in a March 2009 BVWire, featuring the AICPA’s endorsement of the changes—particularly those exempting experts’ draft reports from discovery. Last September we reported that the U.S. Supreme Court ratified the rules, which just became effective on December 1, 2010.

Don’t open the floodgate of attorney communications: “Be careful,” warns Prof. Michael Devitt (Univ. of San Diego School of Law), who spoke at the recent 3rd Annual BVR/Georgetown Advanced Valuation Summit: Resolving Tax and Legal Issues. “The revised Rules contain lots of traps for appraisers.” Litigants can still discover draft reports by a testifying expert if, for example, they forms a basis for the expert’s opinion under the disclosure guidelines of Rule 26(a)(2)(B). “And the new rules apply only to discovery, not to admissibility at the time of trial,” Devitt warns. “So don’t rely on the new rules too much until you see how it all plays out. I don’t think they were all that artfully drafted.”

Likewise, the AICPA advises in a recent update: “Experts should not rely on the protection of these new amendments to open the floodgates to unabated communication with retaining counsel. . . As before, it will continue to be important for experts to exercise good judgment and educate their professional staff as the amendments are implemented.” The AICPA posting also has a summary table comparing the former Rule 26 provisions to the Dec. 2010 amendments, with accompanying explanation of the intended changes. It also notes that the ABA has posted a red-lined version of Rule 26, as amended.

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