Using contingent fee arrangements
Statement of facts
A freelance reporter has requested the Committee on Professional Ethics to render an advisory opinion regarding the permissibility under the Association's Code of Professional Ethics of contingent fee arrangements for reporting services. Under a contingent fee arrangement, the reporter is compensated for the reporter's services only if there is a favorable outcome for the client of the attorney that hired the reporter.
The Committee believes that the practice of contingent fee arrangements, whereby reporters are compensated for their services only if there is a favorable outcome for the client of the attorney that hired the reporter, undermines and dilutes the integrity of the reporting profession and the status of the reporter as a neutral and impartial "officer of the court."
Provision No. 1 of the Code requires a reporter to be fair and impartial toward each participant in all aspects of recorded proceedings. Provision No. 3 of the Code requires a reporter to guard against not only the fact but also the appearance of impropriety. Provision No. 9 requires members to maintain the integrity of the reporting profession. An arrangement whereby a reporter receives compensation for reporting services only if the party to an action represented by the hiring attorney is successful creates at least the appearance of the reporter's partiality or favoritism toward such party or toward an outcome in favor of such party. Essentially, it gives the reporter, or creates the impression that the reporter has, a financial stake in the outcome of the action. Thus, the neutral and impartial "officer of the court" role that a reporter plays in the judicial process is compromised and diminished by the practice of contingent fee arrangements.
The Committee on Professional Ethics believes that contingent fee arrangements for reporting services compromise the neutrality and impartiality of the reporter and, therefore, violate Provisions Nos. 1, 3 and 9 of the Code dealing with the impartiality and neutrality of the reporter, the appearance of impropriety and the integrity of the reporting profession.
THIS PUBLIC ADVISORY OPINION REFLECTS THE STATUS OF THE LAW IN MOST JURISDICTIONS. MEMBERS ARE REQUIRED TO CONFORM TO THE ACCEPTED PRACTICES SET FORTH IN THIS PUBLIC ADVISORY OPINION TO THE EXTENT THAT SUCH PRACTICES ARE CONSISTENT WITH THEIR OWN APPLICABLE STATE AND LOCAL LAWS, RULES AND REGULATIONS.