Agreements giving ‘an advantage to any party’ would be outlawed

The Legal Intelligencer

A court reporter hired by a litigant would no longer be allowed to give that client preferential treatment under proposed legislation in Pennsylvania.

The bill would ban court reporters from offering their clients price discounts, more timely service or other favored terms unless all other litigants are offered the same opportunity.

Any agreement that “gives an advantage to any party” would be outlawed, according to Senate Bill 774.

Large-volume litigants have used their purchasing clout to negotiate long-term or exclusive contracts for court reporting services with preferential pricing or services.

Those who support the bill requiring arms’-length dealings say the contracts raise the appearance of a conflict of interest for court reporters.

“There’s a growing, nationwide trend for insurance companies and other corporate litigants to enter into contracts with court reporting firms or networks, that require the provision of preferential services and pricing that is not made equally available to all parties in the action,” said Irving L. Starkman of Irving L. Starkman Associates in Philadelphia.

“Those arrangements force the court reporters into a position of violating their ethical obligation to act as neutral officers of the court,” Starkman said.

The practice of contracting is not that common, “considering the vast amount of litigation across the country,” said Robert C. Cohen, president of Knipes-Cohen Court Reporting Service.

Bob Ackerman, general manager of seven Philadelphia-area offices of Esquire Deposition Services, said even though his is a nationwide firm, “Only 2 percent of our business is contracting.”

Those court reporters who do enter into contracts are not necessarily surrendering their neutrality, Cohen maintained.

“Providing a discounted price for the volume of work does not change the disposition of the court reporter,” said Cohen. “He or she still remains neutral, with no interest in the outcome of the case.”

The bill is sponsored by state Sen. Stewart J. Greenleaf, a Republican from Bucks and Montgomery counties who chairs the Senate Judiciary Committee.

Any contract or agreement that “undermines the impartiality of the court reporter” would be outlawed by the proposal.

The bill forbids a court reporter from charging different prices for transcripts; from failing to enable all interested parties to receive copies of requested transcripts simultaneously; and from providing any service not offered to all parties in an action.

A transcript that results from a proscribed contract “may not be introduced in evidence or used for any other purpose in a legal action,” according to the proposal.

In addition, violation of the proposed law would be a summary offense carrying a fine of between $500 and $2,000.

Whether an arrangement violates the proposed law would be decided by a court.

Cohen said that the pricing contracts are often thought to be “improper because the court reporter giving the discount could be viewed as no longer being neutral.”

James DeCrescenzo, the sole proprietor of James DeCrescenzo Reporting in Philadelphia, noted how the perception of bias could arise. “The court reporter is the only person in the deposition process who is neutral,” he said.

The National Court Reporters Association’s code of ethics “requires absolute impartiality and avoidance of anything that undermines the reporter’s standing as being impartial,” said Mark J. Golden, the group’s executor director, in Washington, D.C.

Donna S. Cascio of Somerset County, president of the Pennsylvania Court Reporters Association, said the legislation is needed to preserve the impartiality of the profession.

“The standard of practice, the code of conduct, that normally was maintained by court reporters was being eroded by the entering into of contracts on a long-term basis,” said Cascio.

“It’s problematic any time you have a financial relationship that extends beyond the immediate action,” said Golden.

Sixteen states have legislation or court rules that regulate such contracts, according to a consumer watchdog group called the Foundation for Taxpayer and Consumer Rights, in Santa Monica, Calif.

Pam Pressley, the group’s staff attorney, offered examples of what she said were “abuses posed by preferential insurance company deals with court reporters.”

Pressley said that insurers are compiling databases of witness testimony; collecting witness information such as Social Security numbers; ordering reporters to remain after depositions to take dictation of counsel notes; and demanding expedited delivery of transcripts.

Golden said Pressley’s “findings are credible.”

F. Bette Ferguson, owner of Bette Ferguson Court Reporting, said she has heard from defense lawyers who complain that their insurance company clients demand they hire certain court reporting services that “have negotiated a deal with somebody” for a lower price.

As a result, said Starkman, “Attorneys are being told how to run their litigation. They’re being told who they have to use, and a lot of them are very unhappy with the service they receive from preferential service contracts.”

Often, Starkman said, the opposing counsel is unaware of the preferential contract “and may not make an informed decision to object to the use of that reporter.”

The unaware opposing counsel could be injured financially, as well. “We’ve seen instances where the discount rate paid to one party is subsidized by an artificially inflated rate to the non-contracted party,” said Golden.