Court reporting firms’ deals draw fire

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Partnerships raise ethical issue

The Boston Globe

This week, hundreds of court reporters from across the country have gathered in Boston for the centennial anniversary of their role as silent observers who, methodically and unobtrusively, record every word uttered in courtroom proceedings and pretrial depositions.

But amid the celebration and jocularity of the event – which includes an annual contest to determine the nation’s fastest court reporter – is increasing concern over what many court reporters view as a dangerous trend in their profession and a growing threat to the integrity of the legal system: large reporting agencies that cut deals with major corporations, including law firms and insurance companies, for preferential services and pricing.

“We see this as another way that insurers and corporate defendants are trying to rig the justice system in their favor,” said Pamela Pressley, an attorney for the Foundation for Taxpayer and Consumer Rights, a national nonprofit consumer advocacy organization.

The practice puts lawyers representing clients who sue these companies at a disadvantage, opponents say. But proponents of the special arrangements disagree, saying they are mere cost-saving measures.

The deals often include discounted rates and special services, such as free advance drafts of deposition transcripts, databases of transcripts from all cases in which a client company has a stake, and witness information sheets that compile otherwise confidential data, such as Social Security numbers, for quick reference in later cases.

“These are services that court reporters shouldn’t be involved in,” Pressley said. “Court reporters are the one party in depositions who are supposed to be completely impartial and have no ties, financial or otherwise, to either side.”

In a typical scenario, a court reporting firm signs a long-term contract with an insurance company or other corporate litigant, promising to provide exclusive reporting services for all the company’s legal proceedings. The reporting firm then acts as a temporary agency, contracting freelance court reporters to supply those services.

Opponents of the practice say it jeopardizes the impartiality of the judicial system by allowing one side in a legal proceeding to receive special services from an ostensibly neutral court reporter. Detractors also charge that the practice puts litigants who are unable or unwilling to afford such services at a legal disadvantage.

But supporters of the practice, including many large corporate defendants, say such contracts are simply cost-saving devices that hold down litigation expenses. Contracting, they say, is the way of the future in the legal profession, just as mergers and acquisitions have become necessary survival tactics for countless corporations.

“Our clients need services they would like us to provide, and they’re entitled to a discount as a result,” said Michael Sandler, president and chief executive officer of New Jersey-based Amerinet Litigation Services, a court reporting agency with offices across the country. “That’s the American way.”

He likens his company to a Wal-Mart or Barnes and Noble, massive corporate entities that buy merchandise in bulk, enabling them to sell products at a discount. “You need to have a national presence in order to compete to get this work,” Sandler said, “and the local guys don’t have the ability to get that work.

“In my opinion,” he added, “they fabricated all the arguments on the other side because they’re at a competitive disadvantage.”

Sandler insists that clients of reporting agencies receive no unfair preferential treatment, and that such agencies “don’t go beyond any ethical barriers.”

“We give our clients no preferential services and our reporters are under no pressure to treat our clients other than they do other clients,” he said. For now, the matter affects only civil cases, and involves only court reporters who transcribe pretrial witness depositions, not official courtroom proceedings. But, added Pressley, “official court reporters are also concerned about the problem because they see themselves as being next.”

At least 14 states have enacted laws or adopted regulations that outlaw or strictly curtail contractual arrangements between litigants and court reporters. In Massachusetts, Representative Harold P. Naughton (D-Clinton), has proposed legislation that would prevent the practice, and several other states have similar restrictions pending.

“One thing in the judicial process that is never questioned is the record, and that’s what makes contracting all the more dangerous here,” said Laura Hebb, president of Massachusetts Court Reporters Association. “We feel it’s nothing more than extortion.”

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