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Fee Deals Put Focus On Court Reporters


The notion that parties on both sides of a legal case come before a court that weighs the merits of each presentation to render a verdict is perhaps the most sacrosanct principle of the judicial system.

But some observers say that special arrangements between companies and court reporters -sworn officers of the court -tip the scales of justice in favor of firms that cut deals with court reporters who should play an objective role.

An emerging trend where companies enter exclusive contracts to conduct depositions with court reporting firms that provide services to their clients at a fraction of what they charge their opponents compromises justice, some law experts say.

“You can’t have one party have an upper hand when it comes to independence of court reporters,” said Ira J. Raab, a Nassau District Court judge and governor of the national American Judges Association in Williamsburg, Va. “The most important part is the appearance of impropriety. We can’t have one side of the litigation control any phase of the deposition process.” But court reporters who enter the contracts say they are only offering volume discounts to their clients and that it doesn’t threaten objectivity.

“‘Contracting’ is poor slang for price negotiation in a a free market system,” said Carole Hughes, who supports the practice and is senior vice president of Esquire Communications, the largest court reporting firm in the country, with offices in Manhattan, Hempstead and in 11 states.

She added that she knows of no court reporters who have been sanctioned for improprieties under the contracts and cited a recent case in California where a judge ruled that court reporters can do very little to influence a case even if they wanted to.

However, the American Judges Association has issued a statement supporting legislation designed to sever any financial links between court reporters and litigants that could suggest or promote partiality.

So far, 17 states have passed laws that restrict contracts between court reporting firms and companies involved in lawsuits, said Pamela Pressley, an attorney for the Foundation for Taxpayer and Consumer Rights, a nonprofit group based in Santa Monica, Calif., that lobbies for laws to restrict such arrangements.

Raab and some court reporting firm chiefs here, who are critical of the trend, hope New York joins its counterparts across the country. Legislation in New York is now in draft form, Raab said.

“It’s a very unfair situation,” said Sandy Tankoos, president of Tankoos Reporting Co. in Mineola and Manhattan, who has received solicitation letters from insurance companies.

“Can that reporter be impartial, really?” said Tankoos, who said she declines such arrangements, however lucrative. “For all of those reasons I walked away from the work.” The Virginia-based National Court Reporters Association, too, has vowed to lobby for federal and state legislation, calling the laws “the best way to address the ethical and legal problems raised by contracting arrangements.” In some cases, companies demand access to banks of testimony given by witnesses, even if the testimony was provided for an unrelated case. The firm’s attorney may use prior testimony against a witness to show contradictions.

They also complain that court reporting firms with contracts charge their clients less in exchange for high business volume but inflate their fees to the opposing party to offset the discount.

But Heywood (Woody) Waga, vice president of Veritext, a reporting firm with offices on Long Island and in six states, said the drive to outlaw contracting is really an attempt to kill competition.

“It’s not about ethics or morality,” Waga said. “I invite anyone who feels that any court reporter has rendered a service that’s either inappropriate, unethical, immoral, or amoral to file charges with the appropriate ethics committee or court of law and I will stand behind them if it’s unethical.” Some court reporting firms provide depositions to their clients days before they deliver them to the opposing party, giving the opponent a time deficit, Pressley said.

Pressley said insurance companies are most often the companies seeking the contracts because they handle a high volume of litigation.

The practice began in the 1980s. Various states began passing laws banning the practice in the mid-1990s, she said.

“This is one more example of the privatization of justice,” Pressley said.

“You’re not seeing an equal footing for both sides.” She said that the laws passed in 17 states, including Hawaii, Texas, Utah, Minnesota, Virginia, Kentucky and Arkansas, vary in the penalties imposed-from nullifying a deposition taken under such arrangements to disciplining a court reporter with suspension or license revocation.

Hughes, of Esquire Communications, defended the contracts as a legitimate business relationship.

“We think everyone should be treated fairly, and that what you offer to one side you offer it to the other,” she said.

Consumer Watchdog
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