U.S. Supreme Court takes next step to exempt draft appraisal reports from discovery

Nearly six months ago, the BVWire reported that a financial expert’s draft report would no longer be discoverable under proposed changes to Rule 26 of the Federal Rules of Civil Procedure (F.R.C.P.).  We assumed the U.S. Supreme Court would approve the changes and send them to Congress.

Most recent update: On July 15, 2010, the U.S. Supreme Court ratified the proposed changes, including the key provisions that apply the work-product protections of F.R.C.P. Rule 26(3)(A) and (B) to drafts expert reports and expert-attorney communications. Congress is fully expected to approve the rules, to take effect on Dec. 1, 2010. (But note: The new Rules will not apply retroactively, which may lead to delayed depositions in current lawsuits.)

Also noteworthy: “The proposed amendments to Rule 26 recognize that discovery into the bases of an expert’s opinion is critical,” says the Report by the Committee on Rules of Practice and Procedure (posted by attorneys Faegre & Benson). “The amendments make clear that while discovery into draft reports and many communications between an expert and retaining lawyer is subject to work-product protection, discovery is not limited for the areas important to learning the strengths and weaknesses of an expert’s opinion.” The following three types of communications between counsel and an expert will remain open to discovery:

  1. Compensation for the expert's study or testimony;
  2. Facts or data provided by the lawyer that the expert considered in forming opinions; and
  3. Assumptions provided to the expert by the lawyer that the expert relied upon in forming an opinion.

At the same time, the Report recognizes that expert have become critical to the litigation process and the new rules will eliminate the often “tortuous” avoidance steps that experts previously had to take—such as refraining from taking any notes, making any record of preliminary analyses or opinions, and producing any drafts. For a copy of all amended Rules, click here.